Griffiths Energy Provides Development and Exploration Update
/NOT FOR DISSEMINATION IN THE UNITED STATES/
CALGARY, Jan. 28, 2013 /CNW/ - Griffiths Energy International Inc. ("Griffiths Energy" or the "Company") announces an operational update summarizing its current development and exploration activities in Chad.
- Badila-2 development well completed and cased as a producer having intersected 195 meters of net oil pay. Flow tests are scheduled for the coming weeks
- Badila-3 development well has been spudded
- Contracted a 300 km2 3D seismic survey covering Badila field and the Bitanda Ridge, which is expected to be completed in Q2 2013
Badila Development and Exploration
On January 15th, 2013 Griffiths Energy successfully completed drilling the Badila-2 development well to a depth of 2,075 meters. Badila-2 was cased as a producer prior to moving the drilling rig to Badila-3. Operations are underway to flow test Badila-2, which will occur in the coming weeks.
Extensive coring and wireline logging suggest 195 meters of net oil pay at Badila-2, in line with the Company's expectations and more than eight times the oil pay perforated and accessed for testing on the Badila-1 discovery well. At Badila-2 the net oil pay includes 101 meters in the Lower Cretaceous C zone across 5 sands, 92 meters in the Lower Cretaceous D zone across 8 sands and 2.5 meters in the Lower Cretaceous E sands.
On January 24, 2013 the Company spud the third development well in the field, Badila-3. It will take approximately 30 days to achieve the target depth of 2,110 meters.
As previously disclosed, Griffiths Energy had re-entered the Badila-1 well in May 2012 and declared it a discovery after it achieved constrained test flow rates of up to 4,025 barrels per day. The test accessed 23.5 meters of net oil pay, all in the Cretaceous C sands. A previous operator originally drilled Badila-1 in 2002 but did not flow test it.
Griffiths Energy has contracted a 3D seismic program covering more than 300 km2 for the Badila field, as well as the adjoining Bitanda ridge, where multiple exploration prospects have been identified. Preparations to start the seismic acquisition are underway and the program is scheduled for completion in Q2 2013.
Badila Reserves Update
The Company expects to have enough information to review the reserves potential of the Cretaceous light oil in the Badila field at mid-year 2013. By mid-year the Company will have new well information at Badila-2 and Badila-3, 3D seismic over the Badila field and an estimated 2 months production from Badila-1, 2 and 3.
Civil work continues to progress to prepare for development drilling at the Mangara field, which is approximately 95 km from Badila. Well sites for the Mangara-4 and Mangara-5 development wells have been completed, and the well locations have been preset in advance of the arrival of the drilling rig from Badila-3 once drilling operations there are complete.
As previously disclosed, a prior operator drilled three wells at Mangara between 1978 and 2007, with each well encountering oil in multiple stacked reservoirs. The wells were flow tested at rates between 300 bbl/d and 1,875 bbl/d. Griffiths re-entered one of the wells in March 2012 and achieved a natural flow rate of approximately 800 bbl/d.
Connection to the COTCO/TOTCO Export Pipeline
Griffiths Energy has executed the Interconnection Agreement, which addresses physical access to the 250,000 bbl/d capacity COTCO/TOTCO export pipeline. Griffiths Energy has also secured the required 111 kilometers of pipeline right-of-way to connect the Badila and Mangara fields to the export pipeline. Connection to the export pipeline is on schedule to be completed and commissioned in Q2 2013.
The connecting pipeline consists of two segments:
- 16 kilometers connecting the Company's blending and export terminal at Badila to the COTCO/TOTCO export line, which is part of the Company's Inland Transportation Authorization (the "ITA"). The right-of-way clearing and pipeline stringing is underway and the line is expected to be completed and commissioned in Q1 2013
- 95 kilometers connecting the Mangara field to the blending and export terminal. This segment will include both an oil pipeline and natural gas pipeline. The right of way is being cleared and the oil pipeline is on schedule to be completed and commissioned in Q2 2013
A Modification Agreement, which addresses modifications required to the export pipeline to transport Badila and Mangara crudes, has been executed by TOTCO and Griffiths and has been approved by COTCO's board. It is now awaiting COTCO's signature.
Production Facilities and Blending and Export Terminal
Construction of the Badila production facility is on track, with commissioning expected during February 2013. This will include the pipeline tie-in of the Badila-1 and Badila-2 wells, which will be ready for production once the Badila field is connected. Construction of the Mangara production facility is scheduled to begin during Q1 2013 and production is expected to commence in late Q3 2013.
For the blending and export terminal, Griffiths Energy has secured blending and storage tanks, shipping pumps and custody transfer metering. This equipment has been ordered and is on its way to the project site. Export terminal construction is underway and expected to be completed and commissioned in Q3 2013.
Gary Guidry, Griffiths Energy's President and Chief Executive Officer, said:
"Griffiths Energy is ramping up development work at our promising Badila and Mangara discoveries and will be ready to commence production in the second quarter of 2013. The Badila-2 development well, which we have completed and cased as a producer having intersected 195 meters of net oil pay, was inline with our pre-drill expectations. We will now conduct flow tests."
"We have one active drill rig on our property now and expect to mobilize two more rigs during 2013. Our 113 employees, including 69 at our Calgary head office and 44 in Chad, are rapidly advancing our development and exploration projects. With first production expected to commence in the coming months, 2013 should be a transformational year for Griffiths Energy."
About Griffiths Energy International Inc.
Based in Canada, Griffiths Energy is an international exploration and development company focused on oil and gas exploration, development and production activities in the Republic of Chad, Africa. In 2011, the Company acquired their production sharing contracts ("PSCs") from the government of the Republic of Chad. These PSCs provide exclusive rights to explore and develop reserves and resources over a combined area of 26,103 km2 in southern Chad. The PSCs cover two world-class oil basins with development opportunity, oil discoveries, and numerous exploration prospects.
Forward-Looking Statements and General Advisory
Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may," "should," "anticipate," "expects," "seeks" and similar expressions. Specific forward-looking statements included in this press release include comments related to the expected timing of pipeline completion and facilities advancement; expected receipt of regulatory approvals; potential production rates; expected completion of well servicing operations; development of the Mangara field; expected completion of feasibility studies and evaluation work; and other matters.
SOURCE: Griffiths Energy International Inc.For further information:
President and Chief Executive Officer
Griffiths Energy International Inc.
Chief Financial Officer
Griffiths Energy International Inc.
Alan Bayless, Longview Communications
Ben Brewerton / Ed Westropp, FTI Consulting
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