Drilling Report
January 07 2004 - 2:00AM
UK Regulatory
RNS Number:9290T
Cairn Energy PLC
07 January 2004
EMBARGOED FOR RELEASE AT 0700
CAIRN ENERGY PLC
7 January 2004
South Asia - Operational Update
WESTERN INDIA
1. Rajasthan Block RJ-ON-90/1
Cairn is currently involved in an extensive exploration and appraisal programme
across its 5,000 square kilometre exploration block in the Rajasthan Basin.
Three drilling rigs are currently operating across the block, a workover rig is
conducting testing operations, artificial lift trial operations are ongoing and
well stimulations are planned.
Exploration activity is now focusing on the deeper stratigraphic horizons
(Barmer Hill and Fatehgarh) in the northern third of the block with the current
N-B-1 well being 120 kilometres north of the recently drilled GR-A-1 well.
Ten of the fourteen wells drilled on the block to date have encountered
hydrocarbons. Details of wells drilled, currently operating and to be drilled
are shown in the table in the attached appendix.
Recent Exploration Drilling in the Southern Rajasthan Basin
Exploration drilling on the Central Basin High located in the southern part of
the block has met with mixed results. Wells targeting the shallow Thumbli and
Dharvi Dungar plays have encountered variable reservoir quality and sand
thickness. The GR-F-1 well discovered oil in the Dharvi Dungar and flowed 100
bopd of 40 degree API oil on test. The Thumbli section was log evaluated as
hydrocarbon bearing and will be tested in the near future with a separate
workover rig. The GR-A-1 and GR-S-1 wells each encountered residual hydrocarbons
only.
Saraswati
The Saraswati-1 discovery well was placed on an EWT in August 2003. To date the
Barmer Hill reservoir has produced 62,260 bbls (average 817 bopd) and the
Fatehgarh reservoir 5,985 bbls (average 468 bopd).
A 3D seismic survey was acquired over Saraswati during 2003. Following
interpretation of the 3D two appraisal/development wells are now planned to be
drilled updip of Saraswati-1, the first of which is expected to spud by end
February 2004.
Raageshwari
The drill-stem test on the Raageshwari E-1 discovery well at the shallow Thumbli
level flowed 200 bopd and 7.3 mmscfd. A follow-up EWT using artificial lift has
just begun.
The GR-2 appraisal well 2.5 kilometres south of the E-1 discovery well increased
the oil column thickness to between 90 and 120 metres. The GR-3 appraisal well
2.5 kilometres to the north of E-1 began drilling in January 2004. Further
Raageshwari delineation wells are planned.
Q Shallow Appraisal Well
Log evaluation of the top hole section of the original Q-1 Barmer Hill discovery
well suggested hydrocarbons in the shallow Thumbli section. A subsequent
dedicated shallow appraisal well has however confirmed that the hydrocarbons
were residual and consequently there is as yet no firm case for stratigraphic
trapping at the Thumbli level.
Exploration in the Northern Rajasthan Basin
The medium depth drilling programme in the northern third of the block is aimed
at the Barmer Hill and Fatehgarh sections which are expected to be encountered
at shallower depths than in the central and southern areas of the basin.
The N-B-1 exploration well, which is targeting a prospect in the extreme north
of the block approximately 60 kilometres from the RJ-Q-1 discovery, was spudded
on 31 December 2003. This well is currently expected to be followed by an
exploration well on prospect N-A, located 10 kilometres to the south of N-B-1.
The N-J-1 exploration well, located on a prospect 30 kilometres to the north
west of Saraswati, was spudded on 5 January 2004.
2. Gujarat Block CB/OS-2, Cambay Basin
An exploration well is expected to spud in the first quarter 2004 6.5 kilometres
from the Suvali processing plant, on the onshore eastern edge of the block. The
well is to test a prospect which has the potential for shallow gas and deep oil,
similar to that encountered in the nearby Lakshmi and Gauri fields.
EASTERN INDIA
1. Block KG-OS/6
An exploration well located in 110 metres of water depth and designed to test
prospect 6 in the 'pan-handle' part of the block reached 800 metres before the
well encountered shallow overpressures and had to be been abandoned for
operational reasons without it reaching the planned objectives at around 2500
metres. It is not known at this stage as to whether any further drilling will be
attempted on Block KG-OS/6 pending future discussions with partners and the
Ministry.
2. Block KG-DWN-98/2 - ONGC Transaction
Negotiations with ONGC in respect of the transaction announced in October 2003
are progressing and it is anticipated that definitive agreements will be
executed during the first quarter of 2004.
NELP-IV
Cairn has received an invitation from the Indian Government to commence PSC
negotiations for Block GV-ONN-2002/1 in the Ganga Basin which Cairn applied for
on a 100% basis in the NELP-IV exploration bid round.
Cairn has also been awarded one of the three blocks onshore Gujarat for which it
bid jointly with ONGC in NELP-IV. Cairn will have a 30% interest in this block
and ONGC will be the operator.
BANGLADESH
The planned Sangu perforation and re-perforation campaign was successfully
completed in early January 2004. Following this work the tested deliverability
of the producing Sangu wells is approximately 250 mmscfd, although offtake for
2004 will remain dependent on market demand.
Bill Gammell, Chief Executive, commented:
"Cairn is progressing its intensive operational campaign in Rajasthan. Although
ten out of fourteen wells drilled to date have encountered hydrocarbons, a
significant amount of additional drilling and evaluation work still needs to be
undertaken to properly evaluate this 5,000 square kilometre area. A further
update on the progress of this campaign will be given at the time of the annual
results in March.
Following the acquisition of Shell's interests in Bangladesh and against a
backdrop of increasing domestic demand for gas, a successful workover programme
has been completed at Sangu. This has demonstrated the field's capacity to
deliver 250 mmscfd from the existing wells.
I am delighted with the continuing strong performance from our producing assets
in South Asia and we will benefit from the increased interest in Sangu."
Enquiries to:
Cairn Energy PLC
Bill Gammell, Chief Executive Tel: 0131 475 3000
Mike Watts, Exploration Director Tel: 0131 475 3000
Kevin Hart, Finance Director Tel: 0131 475 3000
Brunswick Group Limited:
Patrick Handley, Catherine Bertwistle, Mark Antelme Tel: 0207 404 5959
Notes to Editors:
1. "Cairn" where referred to in this release means Cairn
Energy PLC and/or its subsidiaries, as appropriate.
2. Cairn holds a 100% interest in Block RJ-ON-90/1. Oil &
Natural Gas Corporation Ltd ("ONGC") has a right to 30% of any development area
resulting from a commercial discovery on the block.
3. The main exploration play objectives encountered in the
Rajasthan Basin, commencing with the stratigraphically youngest formation, are:
Thumbli, Dharvi Dungar, Barmer Hill and Fatehgarh.
4. "bopd" where referred to in this release means barrels of
oil or condensate per day.
5. "API" where referred to in this release means American
Petroleum Institute units as a measure of oil specific gravity.
6. "EWT" or extended well test where referred to in this
release means the periodic testing and production of wells for evaluation
purposes.
7. "bbls" where referred to in this release means barrels of
oil or condensate.
8. "mmscfd" where referred to in this release means million
standard cubic feet of gas per day.
9. Cairn holds a 75% exploration interest in Block CB/OS-2,
with the remaining exploration interests being held by ONGC with 10% and TATA
Petrodyne Limited ("TATA") with 15%. ONGC has a right to increase its interest
by 30% in the event of a commercial discovery on the block and has exercised
this right in respect of the Lakshmi and Gauri development areas (Cairn 50%,
ONGC 40% and TATA 10%).
10. Cairn holds a 50% interest in Block KG-OS/6. The remaining 50%
is held by Petrocon India Ltd.
11. Cairn is farming out 90% of its 100% interest in Block
KG-DWN-98/2 to ONGC as part of the transaction and strategic alliance announced
on 1 October 2003.
12. Cairn holds a 75% interest in the Sangu development area. The
remaining 25% is held by HBR Energy, Inc. (a subsidiary of Halliburton Company).
APPENDIX
--------- --------- -------- ---------- ---------- ----------------
WELL AREA DATE RESERVOIR DST COMMENT
DRILLED OBJECTIVE RESULT
------ --------- --------- -------- ---------- ---------- ----------------
120 NORTH N-B-1 Northern Ongoing Barmer Exploration
KILOMETRES Terrace Hill/
Fatehgarh
------ --------- --------- -------- ---------- ---------- ----------------
N-A-1 Northern Planned Barmer Exploration
Terrace Hill/
Fatehgarh
--------- --------- -------- ---------- ---------- ----------------
N-F-1 Northern Planned Barmer Exploration
Intra Hill/
Basin Fatehgarh
High
--------- --------- -------- ---------- ---------- ----------------
N-J-1 Northern Ongoing Barmer Exploration
Intra Hill
Basin /
High Fatehgarh
--------- --------- -------- ---------- ---------- ----------------
RJ-Q-1 Intra Sep-03 Barmer Hill Volatile Appraisal of
RJ-Q-2 Basin / oil Barmer Hill
High Fatehgarh encountered required.
North of in BH / Thumbli residual
Central FT oil only in
Basin Q-2
High
------- --------- --------- -------- ---------- ---------- ----------------
CENTRAL Saraswati-1 Saraswati Nov-01 Barmer Oil in BH/ EWT ongoing
(H-1) Terrace Hill FT @ 2,000
/ bopd
Fatehgarh
------- --------- -------- --------- ---------- ---------- ----------------
Saraswati Saraswati Apr/May Barmer Hill S-2 established
2 & 3 Terrace -03 / a > 300m oil
Fatehgarh column.
S-3 tight
reservoir
appraisal well
--------- --------- -------- ---------- ---------- ----------------
Saraswati Saraswati Planned Barmer Hill Appraisal/
4 & 5 Terrace Feb / development
2004 Fatehgarh wells 4 & 5
planned: wells
6-10
contingent
--------- --------- -------- ---------- ---------- ----------------
Raageshwari Central Feb-03 Thumbli and Oil & gas E-1 EWT ongoing
E-1 & Basin deep in Thumbli E-1 Sidetrack
sidetrack High Volcanics @ 200 bopd established
(CBH) & 7.3 Thumbli oil
mmscfd; across fault
Gas in block
fractured
volcanics Gas associated
@ 2 mmscfd with volcanics
requires further
appraisal
--------- --------- -------- ---------- ---------- ----------------
Raageshwari CBH GR-2 Thumbli GR-2 appraisal
GR-2 & Dec-03 well established
GR-3 GR-3 approx 100m oil
current column in poor
quality Thumbli
reservoir.
GR-3 currently
operating
--------- --------- -------- ---------- ---------- ----------------
Raageshwari CBH Planned Thumbli Appraisal/
GR-4 & development
GR-5 wells 4 & 5
planned: wells
6-10
contingent
------ --------- --------- -------- ---------- ---------- ----------------
SOUTH Guda-1 CBH 1998 Dharvi Dry Oil shows in
Dungar Thumbli and
Dharvi Dungar
------ --------- --------- -------- ---------- ---------- ----------------
Guda-2 CBH 1998 Dharvi Oil in Small fault
Dungar Dharvi bounded
Dungar @ accumulation
2,000
bopd
--------- --------- -------- ---------- ---------- ----------------
RJ-D-1 Eastern Jul-03 Barmer Hill Dry Virtually no
Basin / shows or
Margin Fatehgarh reservoir
--------- --------- -------- ---------- ---------- ----------------
GR-F-1 South end Nov-03 Dharvi Oil in Thumbli to be
of CBH Dungar Dharvi tested
& Thumbli Dungar @
100 bopd;
possible
oil in
Thumbli
--------- --------- -------- ---------- ---------- ----------------
GR-S-1 Flank of Dec-03 Dharvi Dry in DD; Dharvi Dungar
CBH near Dungar possible sands poor and
GR-F & Thumbli oil in wet; Thumbli
Thumbli pay?
--------- --------- -------- ---------- ---------- ----------------
GR-A-1 Southern Nov-03 Dharvi Dry No Thumbli sand.
Terrace Dungar Excellent Dharvi
& Thumbli Dungar sands but
wet
--------- --------- -------- ---------- ---------- ----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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