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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)

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To: Timelord who wrote (999)	4/10/1999 7:33:00 PM
From: Tomas	of 2742

Alex: A minimum of 2 exploration wells are required in Sudan under the terms of the EPS agreement. If the first well proves commercial they'll maybe try to keep the rig and drill a second well. In last years annual report they wrote: "the 1999 drilling campaign will probably consist of at least 2 wells back-to-back". There is a problem however: the annual heavy rains. It usually starts raining in July, but last year it started as early as in May (an El Niño-effect?). So maybe they won't have time enough to drill a second well. It's not impossible to drill during the rainy season if the place has been prepared in advance, but I'm not sure if it's a realistic option or not in this case. Development plans would probably take us into 2000, the next drilling season starts in December. The development phase would be very much like Lundin's En Naga field in Libya, around 2 years from first discovery to first production, perhaps 2 1/2 years. If the first well in Sudan proves commercial I think we can expect oil production to start during 2001.

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