Tuesday Jul 20 1999
The appraisal program on the En Naga North and West field, consisting of two appraisal wells, one re-entry, and 135 kilometres of infill seismic was completed
during the first quarter of 1999. The two appraisal wells, B2-NC177 and B3-NC177 have confirmed the continuity of the reservoirs and established an oil/water
contact in the Lower Gir, which is the main producing horizon. B2-NC177 was suspended as a future water injection well. B3-NC177 testing was completed and
the well flowed at a rate in excess of 3,200 barrels a day (b/d) from two distinct horizons, the Zelten A and Lower Gir.
The new information obtained from the two appraisal wells has been included and incorporated into the field development plan that was submitted to the National
Oil Corporation in March, 1999. In addition to the reserves that have so far been established on the En Naga North structure, incremental oil reserves have been
established by the successful re-entry of the J1-85 well, which is on a separate structure three kilometres west of the original discovery well, B1-NC177. J1-85
flowed at a stabilized rate of 2,203 b/d from the Lower Gir formation. This new oil accumulation, which is referred to as En Naga West will be developed in
conjunction with En Naga North field without any substantial additional infrastructure. A reserves study for the En Naga North and West field contains unrisked
proven and probable reserves of 71 million barrels.
The development concept currently envisaged is targeted at achieving a production rate of approximately 12,500 b/d, within 12 months of the approval of the field
development plan (expected in the fourth quarter of 1999). Peak production is currently estimated to reach 22,000 b/d. An excellent oil pipeline infrastructure is in
place and the company proposes to connect into the Samah field gathering terminals within a radius of 100 kilometres from the En Naga North and West field. The
oil will then be transported to export terminals along the Mediterranean coast.
The total area of block NC177 comprises 9,820 square kilometres. The full appraisal of the remainder of the block is now under way with the completion of the
1,600 kilometres regional 2-D seismic program, which is targeted at firming up the numerous other leads and/or prospects, which have been identified. To date, the
total seismic program has been acquired and processed, which has resulted in the identification of several drillable prospects directly on trend with and to the south
of the En Naga North and West discovery.
CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended March 31
(U.S. dollars)
1999 1998
Revenues
Service income $ 61,305 $ 50,905
Interest income 146 12,702
-------- --------
61,451 63,607
-------- --------
Expenses
General and
admin 208,283 247,918
Foreign exchange
loss (gain) - (2,190)
Interest expense
Long-term 236,660 50,109
Reversal of
write-off of
concession
interests (21,346) -
-------- --------
423,597 295,837
-------- --------
Loss for the
period $362,146 $232,230
======== ========
Loss per common
share .83 cent .62 cent
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