Rachel North Well 14/15-2 Drilling Update
TIDMDES
RNS Number : 3934X
Desire Petroleum PLC
06 December 2010
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For immediate release
6 December 2010
Rachel North Well 14/15-2 Drilling Update
Desire Petroleum plc (AIM:DES) the oil and gas company wholly focussed on the
North Falkland Basin, today provides the following update on the latest logging
results from the 14/15-2 Rachel North well which, following additional wireline
data, will be plugged and abandoned with oil shows .
The results from the new logging data can be summarised as follows:
1.As announced on 3 December 2010 preliminary results from the interpretation of
the initial log data indicated that the well had encountered a 349m gross
interval of sands and shales with hydrocarbons, of which 57m was net pay in
multiple zones.
2.However sampling of the main sand has shown that the hydrocarbons are residual
and that the mobile fluid is water.
3.Analysis of the formation water recovered by sampling indicates much lower
salinity than anticipated and when this value is incorporated into a revised log
interpretation it is confirmed that the sands are water bearing. The salinity
impacts the resistivity of the formation water (Rw) which is used to calculate
the saturation of hydrocarbons in sands. Using industry standard procedures,
the initial interpretation was based on a calculated Rw value from a clear water
sand only 55m above the target sand, of the same stratigraphic age and
depositional setting. This calculated value was consistent with measurements
from other wells in the basin. Unexpectedly, the actual Rw value in the sample
taken from the main sand turned out to be markedly different and the target sand
is now interpreted to be water-bearing.
4.Formation pressures and sampling confirm the presence of good reservoir
quality in the upper sands.
5.A deeper target is still interpreted to be oil bearing, but the interval is
thin and reservoir quality is poor.
The wells drilled by Desire in the Rachel area have identified five fan systems
of varying areal extent and reservoir properties. Good reservoir development has
been recorded in a number of the fans. Some of the sands are of a similar age to
the sands in Rockhopper Exploration's Sea Lion discovery. All of these fans
will now be remapped incorporating the data from the wells to identify areas
where better quality reservoir can be expected and stratigraphic traps
developed. As these fans can only be mapped on 3D seismic, final mapping will
therefore need to await the new 3D data acquisition, which is expected to
commence shortly.
The company will now proceed with collecting the final logging data prior to
plugging and abandoning this well. A full evaluation of all the data will then
be undertaken. After completion of the Rachel North well the rig will move to
drill the Dawn/Jacinta prospect in Tranche I in which Desire has a 100 percent
interest. This prospect is independent of Rachel and is targeting sands at a
number of levels and will explore the prospectivity on the southern margin of
the basin immediately updip from the main oil source rock.
After the Dawn/Jacinta well, Desire is likely to drill another well at a
location as yet still to be decided but the forward drilling schedule is still
to be finalised.
Desire's current cash balances are circa GBP75 million GBP equivalent. These
funds will enable us to drill the Dawn/Jacinta well, an additional well and to
cover our 3D seismic costs.
Commenting on the well, Stephen Phipps Chairman of Desire said:
" Having seen the highly encouraging results from the first logs, the LWD, PEX
and CMR, on this well, plus accompanying oil shows, it is extremely
disappointing that the subsequent wireline logs and fluids sampling have dashed
all the earlier promise of this being Desire's first oil discovery in the North
Falkland Basin. Despite this setback, the presence of hydrocarbons and good
reservoir development have been identified in a number of the Rachel fan sands
and we therefore continue to believe in the prospectivity of the East Flank Play
fairway for future oil discoveries."
Subsurface support is provided to Desire Petroleum by Senergy (GB) Ltd and the
results reported today are based on the work of the Senergy operations team.
This statement has been approved by Dr Ian Duncan of Desire Petroleum plc, who
is a Fellow of the Geological Society, Chartered Geologist, and a member of the
American Association of Petroleum Geologists with over 35 years experience in
petroleum exploration and management.
For further information please contact:
+-------------------------------+-------------------------------+
| Desire Petroleum plc | 020 7436 0423 |
+-------------------------------+-------------------------------+
| Stephen Phipps, Chairman | |
+-------------------------------+-------------------------------+
| Dr Ian Duncan, Chief | |
| Executive Officer | |
+-------------------------------+-------------------------------+
| | |
+-------------------------------+-------------------------------+
| Seymour Pierce Limited | 020 7107 8000 |
+-------------------------------+-------------------------------+
| Jonathan Wright/Stewart | |
| Dickson, | |
| Corporate Finance | |
| Richard Redmayne / Paul | |
| Jewell, | |
| Corporate Broking | |
+-------------------------------+-------------------------------+
| | |
+-------------------------------+-------------------------------+
| Buchanan Communications | 020 7466 5000 |
+-------------------------------+-------------------------------+
| Ben Romney | |
| Tim Thompson | |
| Chris McMahon | |
+-------------------------------+-------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
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