LONDON, April 1 /CNW/ - Serica Energy plc (AIM & TSX-V: SQZ) provides an
update on development activities in the Kambuna field, offshore North Sumatra,
The Kambuna No. 3 and No. 4 deviated development wells are being batch
drilled from the Kambuna production platform, installed earlier this year at
the location of the Kambuna No. 2 well, the first of the three planned
development wells. Kambuna No. 3 has been drilled to a total depth of 7,483 ft
true vertical depth below mean sea level ("TVDSS"). The well entered the
target Belumai reservoir at a depth of 7,166 ft TVDSS and encountered
gas-bearing sands over an interval of 107 ft with a net pay of 77 ft (67
vertical ft) and, as expected, there was no indication of a gas-water contact.
A seven inch production liner has been set in Kambuna No. 3 and the well
will now be suspended while the remaining section of Kambuna No. 4 is drilled.
Later in April all three development wells will be completed for production
and short production tests will be carried out.
As previously reported in the Company's Full Year Results, an independent
reserves report prepared by RPS Energy estimated that, at a 10% discount
factor, the post-tax net present value to Serica of the Proved plus Probable
Kambuna Reserves at forecast prices and costs was US$131.5 million at
31 December 2007 and that at constant prices and costs the net present value
was US$144.7 million. Total 2P reserves, on a 100% basis, were estimated to be
29.7 million barrels of oil equivalent, representing a 15% year on year
Since the report was prepared, terms were agreed for a second tranche of
gas and Serica ultimately expects to achieve an average gas price close to
US$6.00 per thousand cubic feet, about 10% higher than that assumed in the
reserves report. A summary of the reserves report on Form 51-101F1 was filed
on 28 March 2008 on SEDAR at www.sedar.com.
The Company anticipates that production from the field will commence in
December 2008. Serica is the operator of the Kambuna Field and holds an
interest of 65% in the project.
Serica CEO Paul Elis said: "We are very pleased with the positive outcome
of the gas sales negotiations and the excellent contract terms which have been
achieved. With the first two Kambuna development wells successfully drilled
and the third already underway, our development plan is progressing on
schedule, and we anticipate achieving first production in December 2008."
Paul Ellis MA (Oxon) Engineering and Serica's Chief Executive, who has
over 35 years' experience in the upstream oil and gas industry, has reviewed
and approved the technical information contained in this announcement.
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