Bengal Energy (BNG-T) March 31, '14 has commenced the largest drilling campaign in the company's history, with 15 wells planned to be drilled over the next 12 months. Bengal also provides details about this drilling program and an update on its ongoing operations in both Australia and India.
Operational Update
A summary of the drilling program and upcoming milestones in both Australia and India follows.
Cuisinier Drilling- Calendar 2014
Bengal is very pleased to announce its calendar 2014 Cuisinier drilling program (within Authority to Prospect "ATP" 752 - Barta Permit, 30.357% working interest ("WI")) commenced the week of March 25, 2014 with the spud of the Cuisinier-14 development well. Under the 2014 program, Bengal and its joint venture partners (the "JV") plan to drill up to 10 vertical wells in two distinct phases, including 8 development / appraisal wells and 2 exploration wells.
Phase One - Expected to run from late March 2014 to June 2014, with 5 wells expected to be drilled (4 development and 1 exploration) through that period. Each of these wells will be targeting 52 degrees API, ultra-light crude oil, with the locations having been selected based on an improved understanding of the regional geology and enhanced interpretation of 3D seismic. The Phase One drilling locations were selected based on criteria observed in the 6 best performing wells of a total of 14 drilled at Cuisinier by the JV to date. These 6 better performing wells have demonstrated an average gross initial production rate over 90 days ("IP90") of 360 barrels of oil per day (BOPD).
The Company plans to drill one exploration well in the Company's Barta/Cuisinier area targeting both the Cuisinier-type productive Murta zone as well as the deeper Birkhead - Hutton zones. The Birkhead-Hutton zones are very prolific producers in other analog pools within the Cooper basin. There are a number of locations for this exploration well currently under final review. All of these prospects have targeted independent structural closures within the Cuisinier North 3D area immediately adjacent to the Cook and Cuisinier oil fields.
Phase Two - Expected to commence in calendar mid-Q4, 2014, during which the JV will drill 4 development/appraisal wells and 1 exploration well at Cuisinier. The JV will benefit from results obtained in Phase One and will be able to use that information to high-grade locations for Phase Two with a view to enhancing productivity and expanding the boundaries of the pool. The exploration well is planned for the end of Phase Two, (calendar Q1 2015) and will test another Cuisinier North prospect which has been identified on 3D seismic just north of the producing Cook and Cuisinier fields. Due to the phased drilling approach, production impacts at Cuisinier will be staggered through the balance of calendar 2014. With success, Phase One wells are expected to be tied in during calendar Q3 2014 and Phase Two wells are expected to come on-stream at the end of the fourth calendar quarter of 2014.
Bengal plans to announce the overall results of Phase One upon completion of that part of the drilling campaign.
Wompi
In the Wompi Permit (ATP 752 - WI 38%), the JV is planning to drill one exploration well in calendar Q3 2014 targeting Birkhead, Westbourne and Adori formations known to produce in the offsetting Bowen Field located immediately north of the proposed location. Wompi offers Bengal moderate risk exploration in a well-established, oil producing fairway featuring multi-zone potential.
Tookoonooka
In Bengal's Tookoonooka area (ATP 732), partner Beach Energy concluded the acquisition of 300 km2 of new 3D seismic across the block in February, which was fully funded by Beach under the terms of the Joint Venture Agreement ("JVA") with Bengal. The JVA terms provide for Beach to expend AUD$11.5 million to acquire the 3D seismic and drill up to two wells to earn a 50% interest in the Tookoonooka block. The first exploration well was drilled in late 2013 but was not commercial. The seismic data will now undergo processing with interpretation to follow. The new 3D seismic will be utilized to aid Beach and Bengal in selecting the location for the next exploration well to be funded by Beach under the terms of the JVA. This seismic will also be used in evaluating a number of future prospects for a potential series of exploration wells that are expected to be drilled at Tookoonooka under the JVA.
Onshore India
In Bengal's onshore India block situated within the Cauvery Basin (CY-ONN-2005/1 - 30% WI), the Company continues to coordinate with its partners, Gas Authority of India Ltd. ("GAIL") and Gujarat State Petroleum Corporation ("GSPC") for the drilling of three exploration wells. The wells are expected to be drilled by GAIL, the operator, and the first is expected to commence by mid Q3 calendar 2014. The delays that the Company has experienced with respect to this project have stemmed from regulatory and permitting issues, which are aggressively being addressed by the operator. Bengal continues to work with its partners and the relevant government bodies to advance drilling.
Funding of Capital Program
Bengal expects to fund its share of the costs under Phase One of its Cuisinier drilling campaign and the exploration programs at Tookoonooka and onshore India through sources such as current cash on hand, ongoing cash flow and its ability to expand on existing financing arrangements if necessary. Bengal is evaluating a number of lending options with a variety of Canadian-based and international lenders to finance the remainder of its capital programs and provide flexibility respecting future development across all of its permits, at the lowest possible cost of capital.
"The Bengal team has worked extremely hard with its partners to develop a 2014 drilling program that could potentially have the largest impact on the Company in its history. We are very pleased to commence this program which anticipates the drilling of 15 new wells across 4 different onshore permits," said Chayan Chakrabarty, President and CEO of Bengal. "Bengal is very well positioned to provide our shareholders with an exciting, catalyst-rich period over the next 10 -12 months."
Bengal also advises that an updated presentation will be posted on the Company's website no later than April 4th, which contains additional information pertaining to the calendar 2014 drilling program. |
