CALGARY, Feb. 4 /CNW/ - Calvalley Petroleum Inc. (TSX: CVI.A) is pleased to provide an operational update.
The Company is closely monitoring political developments in Yemen and
surrounding areas and does not anticipate any interruption to its
operation in the Masila Basin where Company Assets are located.
Truck Offloading Facility ("TOF") at Block 51 - Calvalley has completed construction of approximately 90% of the TOF.
Commissioning of the facility is expected in late February with full
operational capabilities in March. We expect to gradually increase
production to 10,000 barrels per day (5,000 net CVI working interests).
Pressure maintenance program at Hiswah Field - Calvalley has commenced Hiswah water injection at a rate of 6,000
barrels a day with a single horizontal well. The first water injection
well (H-26) has been performing better than expected. We expect to
commission the second water injector (H-25) during the first half of
2011. The Company plans to drill up to five additional water injectors
in 2011. We expect a total water injection volume of more than 25,000
barrels per day by the end of 2011.
We are currently injecting more than 2 MM cf/d of produced gas into the
reservoir. Beginning in March 2011, we expect to inject an additional 3
MM cf/d of gas bringing total gas injection to approximately 5MMcf/d.
The pressure maintenance program will enhance recoverable reserves and
minimize decline of reservoir pressure.
2D Seismic Acquisition at Ras Nowmah Discovery and nearby prospects: Calvalley has successfully completed a 340 km 2D seismic program over the Plateau area which covers the Ras Nowmah
discovery and nearby structures such as Sueda, East Ras Nowmah, North
Ras Nowmah, South Ras Nowmah, Al Hedba, Al Gadafir, and Malik. Initial
processing of the 2D seismic indicates that good quality data have been
acquired. The first phase interpretation suggests better than expected
prospectivity over the coverage area. To date, two additional prospects
have been identified in the Qishn Formation. These prospects are
similar to the Ras Nowmah Discovery. The program is designed to
high-grade these new structures prior to the selection of drilling
Qarn Qaymah-3 ("QQ-3"): Calvalley continues to make progress in drilling the Qarn Qaymah-3
well. We are currently drilling through the main section of the primary
reservoir of the Fractured Granitic Basement ("FGB"), which was
encountered approximately 40 meters higher than expected. We expect to
complete and test the well in March. The well is designed to drill to a
Total Depth ("TD") of approximately 4,500 meters, of which
approximately 1,000 meters will be an open-hole section over the oil
leg of the FGB. The open-hole section is expected to encounter seven
(7) major fracture zones. Contingent on the success of QQ-3, Calvalley
expects to keep the rig in the Qarn Qaymah area to drill additional
deep exploration/appraisal wells.
Al Roidhat 9 Development: Calvalley has successfully drilled a development well at the Al
Roidhat Field encountering 22 meters (72 feet) of net oil pay with
average porosity of 23.5%. This well adds to Calvalley's productivity
Ras Nowmah-3 - Calvalley has completed the drilling of the Ras Nowmah-3 appraisal
well. The Company experienced downhole technical problems and as a
result, the well was abandoned. The well encountered approximately 18
meters of oil and gas show similar to or better than that of Ras
Nowmah-2 well, which tested approximately 3,000 bbl/d of light oil with
only 9.5% drawdown. The result indicates that the previously assumed
Oil / Water contact at the Qishn S1 and S2 reservoirs could be
significantly lower than our initial estimates. This could result in
significantly higher oil-in-place. However, we caution that these
geological findings must be verified with future production testing and
additional appraisal drilling.
The rig at Ras Nowmah-3 is expected to be mobilized to drill the Ras
Nowmah East-1 exploration well. Site preparation is underway and we
expect to spud the well in March 2011. With completion of the 2D
seismic program discussed above, we believe that there are a number of
exploration targets at the Plateau which will be drilled. Thus, we
expect to keep the rig over the Plateau for the balance of 2011.
Ethiopia - Calvalley has completed the acquisition of an aeromagnetic survey data
covering the majority of the entire Metema Block (26,000 square
kilometres). The survey coverage area is concentrated over the key area
of the Mekele Sedimentary Basin highlighted by relatively thicker
sedimentary rock sections based on our recently completed regional
geological mapping. Based on interpretation of the gravity survey, we
expect to acquire regional 2D seismic in 2011. The first exploration
well is expected to be drilled in early 2012.
Calvalley Petroleum is an international oil and gas company based in
Calgary, Alberta. The Company operates its 50% working interest in
Block 9 in the Masila Basin of the Republic of Yemen and 100% working
interest in the Gimbi and Metema Blocks in Ethiopia.
This press release may contain forward-looking statements including,
without limitation, financial and business prospects and financial
outlooks, and such statements may be forward-looking statements which
reflect management's expectations regarding future plans and
intentions, growth, results of operations, performance and business
prospects and opportunities. Words such as "may", "will", "should",
"could", "anticipate", "believe", "expect", "intend", "plan",
"potential", "continue", and similar expressions have been used to
identify these forward-looking statements. These statements reflect
management's current beliefs and are based on information currently
available to management. Forward-looking statements involve significant
risk and uncertainties. A number of factors could cause actual results
to differ materially from the results discussed in the forward-looking
statements including, but not limited to, changes in general economic
and market conditions and other risk factors. Although the
forward-looking statements contained herein are based upon what
management believes to be reasonable assumptions, management cannot
assure that actual results will be consistent with these
forward-looking statements. Investors should not place undue reliance
on forward-looking statements. These forward-looking statements are
made as of the date hereof.
Forward-looking statements and other information contained herein
concerning the oil and gas industry and Calvalley's general
expectations concerning this industry are based on estimates prepared
by management using data from publicly available industry sources as
well as from reserve reports, market research and industry analysis and
on assumptions based on data and knowledge of this industry which
Calvalley believes to be reasonable. However, this data is inherently
imprecise, although generally indicative of relative market positions,
market shares and performance characteristics. While Calvalley is not
aware of any misstatements regarding any industry data presented
herein, the industry involves risks and uncertainties and is subject to
change based on various factors.
SOURCE Calvalley Petroleum Inc.
For further information:
Edmund Shimoon, Chairman and CEO
Memet Kont, President and COO
Zacharie Magnan, Acting CFO
+1 (403) 297-0490