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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