Matra Shuts-In Ops at Well-12

- Matra Shuts-In Ops at Well-12

Wednesday, August 17, 2011
Matra Petroleum plc

Matra announced an update on its operations and plans in the Sokolovskoe Field, Russia.

Current Operations

Well-12

Well-12 has suffered from a build-up of wax in the tubing and an increase in water cut to 70% and has ceased to flow and has now been shut-in.

Prior to the increase in water cut and shut-in of the well, the Company had sought an independent review of the status of well-12. This review, which was conducted by Gaffney, Cline & Associates ("GCA"), concluded that, although there was insufficient data available to definitively determine the source of the water, the available data was not typical of an aquifer influx and that the water may be flowing behind the production liner from overlying formations. The GCA review recommended acquisition of further data in order to identify the source of the water before attempting a remedial work-over.

Following the GCA review, the directors have sourced a work-over rig (expected to be on site on August 17) that will allow the Company to pull and clean the production tubing and then to artificially place the well into temporary production, using nitrogen. This will also allow production logging over the entire liner interval and into the production casing and will provide the best opportunity to identify the source of the water production.

Following production logging, a pressure survey will be conducted before deciding on the viability of further remedial work on the well.

Well-13

After establishing water-free oil production, the leased production equipment at the site was demobilized and the well shut-in. Analysis of the production and pressure data shows that the well should be expected to produce at around 100 bopd with the installation of an electrical submersible pump and surface production facilities at the site. A firm decision to install this equipment has not yet been made but the directors expect that its installation will enable well-13 to generate a positive cash flow after the deduction of production taxes and other costs. The directors have taken the decision to await the results of the well-12 work-over before committing to this expenditure.

Future Program

Evaluation of the Sokolovskoe Field requires two further elements before proceeding with a full field development:

• Delineation of the full extent of the Sokolovskoe structure by means of a full field 3D seismic survey; and
• The establishment of commercial production over an extended period and the confirmation of the geological model by the drilling of well-14.

Recent changes by the Russian authorities to the drilling approval process require the Company to complete additional environmental and ecological surveys and studies prior to approval of new wells. These studies have commenced and approval for well-14 is expected later this year.

The cost of acquiring the 3D survey would be approximately $2 million and the cost of well-14 is estimated at $5 million. These costs are subject to change due to variations in exchange rates and local market conditions. Additional funding would be required before the Company could commit to such a work program.

The Company will continue to update the market as required.

Managing Director, Peter Hind commented, "The continuing problems at well-12 are frustrating. We are, however, continuing efforts to obtain further information from the well and to see if we can continue production. Importantly, given that the well is low on the mapped structure, it is not key to the overall development of the field.

"The Aphonenski reservoir has been produced over the longer term in nearby fields and the prognosis for well-14 remains good."

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Matra Completes Workover Well in Sokolovskoe Field

- Matra Completes Workover Well in Sokolovskoe Field

Wednesday, July 20, 2011
Matra Petroleum plc

Matra announced an update on operations in the Sokolovskoe Field, Russia.

The planned workover on well-12 was completed at the end of June by installing a production packer, with the intention of isolating the productive zones in the well. The well was returned to production by swabbing on July 2 and has been on production since that time. During this period the well has averaged 352 bpd with a water cut of around 42% (net 203 bopd).

Fluid loss from the annulus confirmed a leak in the casing/liner system, although installation of the production packer has not stopped water production as intended. Well-12 was drilled through the oil-water-contact ('OWC') and encountered various operational problems during drilling and side-tracking, making definitive analysis difficult. Well performance has been reduced by the presence of water in the tubing and the high viscosity of the resulting oil/water emulsion. At the current time, the source of the water has not been identified and the well will continue on production and to be monitored.

It is planned that future wells will be terminated above the OWC thereby facilitating good cement bonding and zone isolation. The independent study carried out last year by ERC/Equipoise concluded that the Company should encounter better reservoir to the north of the two existing wells where full development of subsurface reefs are expected.

Planning and approvals for the full field 3D seismic survey and the drilling of well-14 are continuing with both operations intended to commence later this year.

Matra's Managing Director, Peter Hind commented, "Well-12 continues to produce commercial quantities of oil and is generating cash flow. The well has also provided us with invaluable data on the structure of the Sokolovskoe Field. Given our improved knowledge from the data, the independently verified study of the field's potential and the forthcoming 3D seismic survey, we look forward to progressing with Well-14 later this year."

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Matra Pumps Production in Russia

Matra Pumps Production in Russia

Tuesday, April 05, 2011

Matra Petroleum plc

Matra announced that production has commenced from both existing wells in the Sokolovskoe Field, Russia.

Neither well has yet stabilized and as expected both will require acid stimulation and/or pump installation to maximize production rates. Well -13 is currently producing approximately 65 bopd and well-12 approximately 100-150bopd, although both well rates are fluctuating significantly and have not yet unloaded residual mud and completion fluids from the wellbore. In total over 2,000 bbls of oil have been produced from the wells and oil sales are being made on a regular basis.

Attempts to stabilize flow rates are being made before conducting the pressure surveys which will enable us to estimate the capability of the wells after acidization and/or pump installation. It is notable that neither well has yet produced any formation water.
Pressure surveys and analysis will occur during the next two weeks and a plan to maximize production rates will follow.

The weather in Orenburg has been a little unusual this year with some late heavy snowfalls which have delayed demobilization of the side-track rig. The main thaw has now begun and heavy load transportation will be limited during April whilst the snow melts and clears.
Matra's Managing Director, Peter Hind commented, "Well-12 side-track is producing at broadly similar rates to the original hole prior to acidising and the data from forthcoming pressure surveys should allow us to confirm the potential to improve production substantially. Whilst it is not possible to comment on ultimate production rates at this stage, the original well demonstrated an eight-to-ten fold improvement after acid.

"It is encouraging that the water appears to have been isolated, by remedial cementation, in well-13 and it was anticipated that this procedure would also damage the oil reservoir. Pressure data acquisition will again allow us to estimate likely rate improvements.
"We are currently planning to mobilize a coiled tubing unit to the well sites to ensure the proper clean up and to undertake acidization as appropriate. This work will commence once the road restrictions associated with the annual thaw are removed. Until that time data acquisition and oil production/sales will continue."

Matra Commences Production in Russia

Matra Commences Production in Russia

Tuesday, April 05, 2011

Matra Petroleum plc

Matra announced that production has commenced from both existing wells in the Sokolovskoe Field, Russia.

Neither well has yet stabilized and as expected both will require acid stimulation and/or pump installation to maximize production rates. Well -13 is currently producing approximately 65 bopd and well-12 approximately 100-150bopd, although both well rates are fluctuating significantly and have not yet unloaded residual mud and completion fluids from the wellbore. In total over 2,000 bbls of oil have been produced from the wells and oil sales are being made on a regular basis.

Attempts to stabilize flow rates are being made before conducting the pressure surveys which will enable us to estimate the capability of the wells after acidization and/or pump installation. It is notable that neither well has yet produced any formation water.

Pressure surveys and analysis will occur during the next two weeks and a plan to maximize production rates will follow.

The weather in Orenburg has been a little unusual this year with some late heavy snowfalls which have delayed demobilization of the side-track rig. The main thaw has now begun and heavy load transportation will be limited during April whilst the snow melts and clears.

Matra's Managing Director, Peter Hind commented, "Well-12 side-track is producing at broadly similar rates to the original hole prior to acidising and the data from forthcoming pressure surveys should allow us to confirm the potential to improve production substantially. Whilst it is not possible to comment on ultimate production rates at this stage, the original well demonstrated an eight-to-ten fold improvement after acid.
"It is encouraging that the water appears to have been isolated, by remedial cementation, in well-13 and it was anticipated that this procedure would also damage the oil reservoir.

Pressure data acquisition will again allow us to estimate likely rate improvements.
"We are currently planning to mobilize a coiled tubing unit to the well sites to ensure the proper clean up and to undertake acidization as appropriate. This work will commence once the road restrictions associated with the annual thaw are removed. Until that time data acquisition and oil production/sales will continue."