CALGARY, Oct. 22, 2012 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (TSX VENTURE: SDX) is pleased to announce the following operational update for its recent work program in Egypt.
NW GEMSA CONCESSION
The NW Gemsa 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.
Current production from the Al Amir SE and Geyad fields is approximately 8,400 bopd gross (840 bopd net to Sea Dragon). Cumulative production from the NW Gemsa Concession has now exceeded 9.42 million barrels of 42 degree API Crude oil.
Water injection is ongoing with three injectors currently operating at Al Amir SE Field and one injector at Geyad Field. Current total injection rates are approximately 16,400 barrels per day. Cumulative injection to date is 5.35 million barrels at Al Amir SE and 1.09 million barrels at Geyad.
Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas at 50%, as operator and Circle Oil PLC with 40%.
This development well was spud on September 10, 2012 with the objective of appraising the Kareem Shagar and Rahmi sands. The well was drilled to its total depth of 6,200 feet, however, it was subsequently sidetracked as the Shagar sands were found to be water bearing. The sidetrack was successfully drilled to a final depth of 6,350 feet, encountering seven feet of net pay in the Shagar sands. The well was completed in the interval 5,996 to 6,006 feet and tested at 1600bopd on a 24/64" choke size. The well is currently awaiting tie-in as an oil producer.
Geyad-1x Well Work Over:
Operations are currently underway to re-complete this oil producer in both the Rahmi and Shagar sands. Both intervals will be re-perforated and a new completion string will be run that will allow commingled production to occur. Cumulative oil production from this well to date is 764,000 bbl.
Al Amir SE-13 Well:
This development well was spud on October 14, 2012 with the objective of appraising the northern area of the field between AASE#4 and AASE#11 wells. The well is currently drilling below 2,900 feet. Plans are to produce this new well from the Kareem Shagar and Rahmi sands.
KOM OMBO CONCESSION
The Kom Ombo 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.
2012 Development Drilling: Two new wells were drilled, AB#16 and AB#17. The AB#16 was completed as a Kom Ombo "A" producer and the AB#17 was dry and abandoned. As well, the AB#11 well was recompleted in the Six Hills F-1 Formation after having been suspended since March 2011.
2012 Exploration Drilling: Two wells were drilled, West Al Baraka #2 well which resulted in a new Abu Ballas oil Discovery and the Faris well which was dry and abandoned.
A development lease application was submitted to the Government for the West Al Baraka #2 discovery well and once approved the well will be placed on an extended test to assist in the preparation of a plan of development.
With the drilling of these two exploratory wells, Sea Dragon has now fulfilled its work commitment for the concession and will be surrendering the balance of the Kom Ombo Block 2 Concession in January, 2013.
Current production from the Al Baraka field is averaging approximately 535 bopd gross (267 bopd 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%.
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 2012 drilling and capital expenditure programs of the NW Gemsa and Kom Ombo Concessions and the results 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". All reserves information contained herein as well as the net present value of such reserves should be considered 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 development and political, social and other risks inherent in carrying on business in Egypt. 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 Corporation 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. Although Sea Dragon 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. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Actual results may differ materially from those currently anticipated. See Sea Dragon's Annual Information Form for the year ended December 31, 2011 for a description of the risks and uncertainties associated with the Company's business, including its exploration activities. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
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SOURCE: Sea Dragon Energy Inc.
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