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CALGARY, April 25, 2012 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (TSX VENTURE: SDX) is pleased to provide the following operational update for its Kom Ombo and NW Gemsa concessions in Egypt.
KOM OMBO CONCESSION
This concession is located onshore in the southern part of Egypt some 1,000 km south of Cairo. It contains the Al Baraka oilfield, producing light oil from multiple reservoirs and an exploration area of 11,400 km².
West Al Baraka-2 Well:
The West Al Baraka-2 (WAB-2) exploratory well, the first well of the 2012 drilling campaign, was successfully drilled to a total depth of 4,070 feet in the Basement. The West Al Baraka structure is located 9 km to the southwest of Al Baraka oil field.
The WAB-2 well encountered oil shows in the Abu Ballas sand and the Six Hills F reservoirs, both zones are productive in Al Baraka oilfield. Petrophysical analysis indicated oil saturations in the primary target being the Abu Ballas sand.
The Six Hills F sand was perforated and tested but was found wet. A bridge plug was set at 2,230 feet and the Abu Ballas sand was selectively perforated in the interval 2,085-2,164 feet. The well was tested for a short period and 37 degree API oil was recovered at surface with no water. The Abu Ballas sand is productive in Al Baraka oilfield and requires hydraulic fracturing stimulation to improve productivity. In order to establish the well productivity, a decision was made to release the rig and work on designing an appropriate hydraulic fracturing program. Two previously drilled wells on the structure also encountered oil shows in the Abu Ballas Formation but were not tested.
The forward plan is to integrate the WAB-2 well information with the recently reprocessed seismic to finalize mapping of the West Al Baraka structure, estimate reserves, develop an appraisal program and apply for a development lease.
The rig from WAB-2 will now move to drill this development well, located in the Al Baraka development lease. AB-16 well is to be drilled to a total depth of 7,700 feet into the basement. The main objective of this well is to appraise the deeper Kom Ombo A sands in an up dip position to the ABSE-1 producer, 6 km to southeast.
Current production from the Al Baraka field is averaging approximately 520 Bbl/d (260 Bbl/d net to Sea Dragon).
Sea Dragon has a 50% working interest and is a joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50%.
NW GEMSA CONCESSION
This concession is located onshore on the west side of the Gulf of Suez, some 300 km southeast of Cairo. Two main oil fields are producing light oil, the Al Amir SE field along with the Al Ola extension to the south and the Geyad field to the north.
AASE-11 ST-1 Well:
This development well encountered 42 feet of oil pay in the Shagar reservoir and 22 feet in the Rahmi reservoir. The well was successfully completed in the Shagar reservoir in the interval 10,730 feet to 10,780 feet and good oil flow was established from a short test. The rig was released and the well will be placed on stream shortly to contribute to the ramp up of the concession production towards the 10,000bopd target.
This development well, located in the south eastern area of the field approximately 2 km northwest of the AASE-8 surface location and 705 meters southwest of AASE-5 producing well. The well is to be drilled to a proposed total depth of 9,800 feet in the Upper Rudeis Formation, on an untested fault compartment.
The primary objective of this well is to produce oil from the Shagar and Rahmi reservoirs and appraise the shallower South Gharib and Belayim reservoirs.
Current production from the Al Amir SE and Geyad fields is approximately 8,300 bopd (830 bopd net to Sea Dragon). Cumulative production from the NW Gemsa Concession has now exceeded 7.5 million barrels of 42 degree API Crude oil.
Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas at 50%, as operator and Circle Oil PLC with 40%.
Commenting on the latest developments in Kom Ombo, Chairman and CEO, Mr. Said Arrata, said "It is most encouraging to have discovered new oil in the West Al Baraka structure in the Kom Ombo Concession. Although it is rather early to declare commerciality on this new find, it bodes well for the remaining drilling program on the concession."
Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the development of the Al Baraka field and events or projections referenced or implied herein should be viewed as forward-looking statements.
Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, costs and timing of exploration and production development, availability of capital to fund exploration and production development; political, social and other risks inherent in carrying on business in a foreign jurisdiction, the effects of a recessionary economy and such other business risks as discussed herein and other publicly filed disclosure documents. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.
Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
This news release contains forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. When used herein, words such as "intended" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on assumptions by and information available to the Company. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Actual results may differ materially from those currently anticipated. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
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