Calvalley Petroleum Inc. (TSX: CVI.A)
CALGARY, May 5 /CNW/ - Calvalley Petroleum Inc. ("Calvalley" /
"Company") is pleased to announce that it continues delivery of crude
oil into the Masila Export Pipeline System ("MEPS") through the
Company's Truck Offloading Facilities ("TOF") located at Block 51.
Current deliveries consist of crude oil from Hiswah Field, in Block 9,
and continue to utilize existing space in the Block 51 metering system.
This temporary arrangement will be in place until mid-May, when the
Company's own metering system will be fully functional, at which time
Calvalley will immediately commence the shipment of blended crude from
all Block 9 fields including Hiswah, Al Roidhat, and Ras Nowmah. As
well, Calvalley's blended crude oil will continue to receive the Masila
Blend price which is benchmarked to Brent Crude pricing.
Calvalley also continues its evaluation of the Qarn Qaymah-3 ("QQ-3")
well through a number of extended production flow and pressure build-up
tests. As previously announced, QQ-3 was drilled to a total depth of
4,460 meters, including a highly deviated openhole section of
approximately 1,000 meters in the Fractured Granitic Basement ("FGB").
As per the evaluation reports from two independent petrophysical
consulting firms, in Calgary, the wellbore image logs and electrical
logs indicate that the FGB reservoir is extensively fractured and fully
oil saturated. QQ-3 intersected a total hydrocarbon column of 434
meters, including 172 meters of condensate rich gas and 262 meters of
oil column. The oil column could be potentially thicker, as no oil
water contact has been encountered. These independent petrophysical
evaluations also highlight that average fracture porosity, which is a
direct indicator of storage capacity or reserve potential of the
reservoir, was significantly higher than QQ-2. This interpretation is
in line with the improved rate of penetration experienced while
drilling QQ-3, as compared to QQ-2.
During the QQ-3 initial testing phase, the test recovered a significant
volume of drilling fluid which was used in drilling of the adjacent
well (QQ-2) but this gradually turned to oil flow. However, the oil
production was unsustainable due to limited inflow. Having produced the
drilling loss fluid of QQ-2 from QQ-3 indicates that there is open
communication between QQ-2 and QQ-3, which confirms the presence of a
wide network of interconnected fractures in the FGB. However, as
intermittent flow and build-up testing proceeded, the permeability of
the formation gradually declined, indicating impairment to fluid inflow
to the well-bore from the formation due to a potential precipitation of
hydrocarbon solids (such as Paraffin and Asphaltene), in the openhole
section of the QQ-3 well-bore. A number of fluid samples were collected
for lab analysis.
While Calvalley is encouraged with the increased hydrocarbon column and
presence of an extensive network of natural fractures in the basement
of the Qarn Qaymah structure, the key challenge ahead for the Company
is to remove any impairment that limits oil inflow. The Company is
optimistic that the pending lab test results will indicate the
potential of down-hole chemical treatment to prevent the future deposit
of paraffinic and asphaltenic compounds, which is a common production
impairment phenomenon in many oil fields around the globe.
Calvalley's plan, going forward, includes the completion of the
currently proceeding laboratory analyses of formation fluids, followed
by the design of a remedial stimulation program to enhance oil inflow.
The Company is in communication with a number of experienced global oil
services companies to assist in designing a suitable stimulation
program for QQ-3.
The recently completed Ras Nowmah East -1 (RNE-1) exploration well
reached to a total depth of 1559 meters on April 6. The primary target
zone of Qishn Clastics was encountered, as expected, and a number of
intermittent oil shows were encountered at depths from 1390 - 1466 m.
Electrical logs were run and these were independently interpreted to
have a potential net oil pay of 13 m (60 m gross), at depths from 1390m
to 1471.5m, with a calculated average oil saturation of 44%. Based on
these indications of the presence of an oil charged system, from both
logs and drilling cuttings, the well was cased and tested.
Unfortunately, the test results were disappointing and produced mainly
formation water. The Company expects to utilize RNE-1 data to optimize
future exploration success in the immediate Plateau Area. Based on the
growing evidence of oil migration throughout the region, the Company
will continue investing in exploration activities over this Plateau
Area of Block 9.
Calvalley is an international oil and gas company, with offices in
Calgary, Alberta, Canada, that operates its 50% working interest in
Block 9 of the Masila Basin, in The Republic of Yemen. Calvalley also
operates its 100% working interest in the Gimbi and Metema Blocks of
the Blue Nile Basin, in The Republic of Ethiopia.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
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.
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:
firstname.lastname@example.org or +1 (403) 297-0490
Edmund Shimoon, Chairman and CEO
Zacharie Magnan, Vice-President Finance and Acting CFO