Update CALGARY, AB, Feb. 6 /CNW Telbec/ - Calvalley Petroleum Inc., (TSX: CVI.A)
- Calvalley Petroleum, an international, junior oil and gas company based in Calgary, Alberta, is pleased to provide the following update on its operations on Block 9 in the Republic of Yemen.
Drilling & Completions
- The drilling rig was mobilized on January 4, 2006 to the eighth horizontal Hiswah well, which was spudded on January 8, 2006. The well was drilled with 591 meters of open hole into the oil-bearing Saar-Naifa formation. The rig was released on January 22 and mobilized to the ninth horizontal well, which was spudded on January 27, 2007 and is expected to be finished drilling by the middle of February.
- Completion of the Hiswah wells 5, 7, 8 and 9, as well as, the Auqban-1 well and the Al Roidhat wells 2, 3 & 4 is scheduled to commence on February 15, 2006. Each well will be equipped with a down hole pump and placed on production test in preparation for full production upon completion of the Central Processing Facility ("CPF").
- Tenders for various services including a second drilling rig, as well as, a service rig have been received. Evaluation of the tenders is underway with the awarding of contracts expected sometime in February.
Central Processing Facility
- Fabrication of a 20,000 barrel storage tank at the Hiswah CPF is 90% completed.
- A Group separator with a capacity of 60,000 barrels per day is being fabricated in Abu Dhabi and is 60% complete. The separator is expected to be shipped to Block 9 by the end of February.
- A twenty five person living facility at Hiswah is 95 % complete.
- Site work is continuing and additional equipment is expected to arrive mid-February.
- The Company expects to complete the CPF by March 31, 2006, at which time production will be increased to 10,000 bbls per day (Calvalley share 5,000 bbls per day).
Expansion of Block 18 Truck Unloading Facility
Block 18 operated by Safer Exploration Company had limited capacity to receive trucked oil, creating a bottleneck in production and resulting in several operational interruptions. By mutual agreement, Calvalley has undertaken the task of designing and constructing new truck offloading facilities adjacent to the existing Block 18 facility. Significant progress has been made on this project including achieving the following milestones.
- Site selection and survey have been completed.
- Four 500 barrel, skid mounted storage tanks have been fabricated.
- A custody transfer meter and pump purchased in Canada have arrived in Yemen.
- Site preparation and construction are underway and are expected to be completed by the end of February.
- It is anticipated that the expansion of the truck offloading facility will be completed on time, prior to end of the first quarter.
Current Production
The level of oil receipts at Block 18 has fluctuated over the past 45 days, ranging from nil to 5,000 bbls per day. Daily receipts at the Safer facility, since deliveries began on the 15th of December 2005, have averaged approximately 2,000 bbls of oil per day. Continuing interruptions are anticipated until expansion is completed next month.
Transmission System
The Company is engaged in negotiations with the Ministry of Oil and Minerals on various alternative main line transmission systems. It is expected that the route and pipeline size will be finalized within the next month, such that materials can be ordered and design completed. The objective is to have the main line transmission system operational before the end of 2006, at which
time it is anticipated that production will increase to approximately
30,000 bbls of oil per day.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This press release may contain forward-looking statements, including expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These risks include but are not limited to: the risks associated with the oil and gas
industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainties of reserve estimates; the uncertainty of estimates and projections related to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rates fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects
or capital expenditures. Additional information on these and other factors that could affect Calvalley's operations or financial results are included in Calvalley's reports on file with Canadian securities regulatory authorities.
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