FIELD ACTIVITIES / Carmanah Updates Indonesian Activity
TSE SYMBOL: CKM
JULY 27, 1998
CALGARY, ALBERTA--In response to continuing inquiries from
shareholders and the investment community, Carmanah Resources Ltd.
("CKM" - TSE) is pleased to provide the following information.
Drilling is continuing at the MPA-1 location in the Camar Field
offshore Java, Indonesia. A sidetrack to the original wellbore is
underway and is expected to reach projected total depth in the
next several days. If warranted by drilling results, MPA-1 will
then be completed and placed onstream in early August, after which
the Pride Pennsylvania jackup rig will be released to another
operator.
Immediately upon rig release, Carmanah will be able to re-enter
Camar-6 to conduct pressure surveys and production logging
operations. This information will assist Carmanah in determining
if remedial activities to enhance well productivity are warranted.
Production at Camar-6 has stabilized at a rate of approximately
430 BOPD since being placed onstream in late June.
A snubbing unit is scheduled to be on location at CN-3 in the
Camar Field in early August. The completion string in the well
will then be pulled and the faulty safety valve that has prevented
production from this well will be removed. Thereafter, production
will commence at this location.
Production at Camar is currently averaging 1,700 BOPD. Today, a
lifting of approximately 80,000 barrels of crude oil in inventory
was initiated by Pertamina, the Indonesian state oil company. The
last lifting of Camar crude was in excess of 100,000 barrels of
crude oil in late May 1998 with an invoiced selling price of
US$13.93 per barrel.
As previously reported, by mid-August Carmanah expects to have
three new wells, CN-3, Camar-6 and MPA-1, all onstream.
The Company's six-month results and a further production update
will be reported to shareholders in late August. While the
accounts are still being finalized, second quarter results are
likely to resemble those reported for the first quarter as no new
wells were placed onstream at Camar until late June. Second
quarter capital spending on drilling and facilities was financed
from cash balances and a portion of the Company's established
credit facility.
Carmanah also advises that it is in compliance with all terms of
its credit facility and is current with its trade creditors. As
production levels improve during the balance of the year, Carmanah
should become cash flow positive, even with current low oil
prices.
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