Sunday, August 2, 2009

Conoro Updates.

Operations update

The Amguri A-14 well was drilled and completed within the Tipam sand in late 2008. Initial test results indicate that the well is capable of flowing over 6.0 million standard cubic feet per day ("MMcf/d"). No signs of depletion were apparent from the pressure build-up analysis.

The pipeline for the Amguri A-14 well tie-in into the central process facility was completed at the end of May 2009. The well was put into production on 2nd June at an initial rate of 1.0 MMcf/d (0.6 MMcf/d net to Canoro) dry gas on a 10/64" choke with a with a tubing head pressure of 2180 psig (shut in tubing head pressure was 2200 psig). The rate is expected to be increased up to 4 MMcf/d (2.4 MMcf/d net to Canoro) in conjunction with the demand for gas from the local tea gardens that occurs during the six-month growing season starting in late June. Prior to bringing the A-14 well on production the Amguri field was producing 4.1 MMcf/d (2.5 MMcf/d net) gas with an associated 300 barrels per day ("bpd") (180 bpd net) of condensate, or 590 barrels of oil equivalent per day ("boed") net to Canoro. Production has been restricted pending the installation of the condensate recovery and gas compression facility. The facility, which is primarily comprised of gas compression for injection and condensate stabilization, is on schedule for Q1 2010 commissioning. All major pieces of equipment have been ordered and are in the manufacturing process. Construction is anticipated to commence in Q4 2009.

The Amguri A-11 well is planned to be converted from a Main Barail gas producer to a dual completion well for gas injection into the Main Barail and production from the Mid-Barail formations by the end of Q3 2009. Subsequent to recompletion, the well will be produced solely from the Mid-Barail formation. The conversion is not expected to add significant incremental condensate daily production, but designed to preserve the reservoir pressure in the Main Barail zone until gas injection is implemented for optimal recovery of condensate reserves.

The planned installation of an electric submersible pump (ESP) in the Amguri A-5 oil well, brought back on stream in early 2009, has been postponed while watercut performance is being evaluated. The well had been producing approximately 30 bpd of oil net to Canoro prior to being shut in due to water influx. Canoro is currently reviewing the reservoir and well characteristics to determine the feasibility and options for a water shut-off work over.

Work continues on the Pre-Stack Depth Migration ("PSDM") re-processing of Amguri 3D seismic data with initial results expected in Q3 2009 and subsequent re-interpretation being completed in Q4 2009.


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