GED Global Energy

RNS Number:4849A
Global Energy Development PLC
28 March 2006


Immediate Release                                                 28 March 2006


                         GLOBAL ENERGY DEVELOPMENT PLC


                      RESERVE REPORT AND OPERATIONS UPDATE



Global Energy Development PLC ("Global" or the "Company"), the Latin America
focused petroleum exploration and production company (LSE-AIM: "GED"), is
pleased to announce details from the reserve report prepared on the Company by
its independent engineers Ryder Scott Company, LP ("Ryder Scott") as at 31
December 2005 and provide an operations update.


Reserve Report


In line with the newly published Guidance Note for Mining, Oil and Gas companies
listed on the AIM Market of the London Stock Exchange, Global is providing
further details of its recently completed Competent Persons Report prepared by
the independent petroleum engineers Ryder Scott. Ryder Scott reported that as at
31 December 2005, proved plus probable reserves ("2P reserves") net to Global
totalled 17.5 million barrels of oil and proved plus probable plus possible
reserves ("3P reserves") net to Global totalled 67.5 million barrels of oil.
Based upon an approximate Brent Price of $58 per barrel, this being the closing
price as at 31 December 2005, Future Net Revenues ("FNR") for the 2P reserves
net to Global totalled $621 million and FNR for the 3P reserves net to Global
totalled approximately $2.8 billion.


Operations


Production


The Tilodiran 1 and Macarenas 1 wells within the Rio Verde contract in Colombia
both ceased production during the fourth quarter of 2005 due to casing failures
and neither has contributed to production so far in 2006. These wells were first
drilled over a decade ago by a previous operator and recompleted by Global,
Tilodiran 1 in December 2004 and Macarenas 1 in January 2005. Workovers to
restore production on these wells are unlikely to commence until the second half
of 2006 due to a shortage of workover rigs and necessary downhole equipment.


Completion operations are underway on the new exploratory well, Tilodiran 2,
within the Rio Verde contract. This well was successfully drilled to a final
depth of 13,350 feet and intercepted six potentially oil productive zones.
Global is currently testing the Upper Massive Ubaque reservoir, which is the
first of several production tests on this well. A current natural flow rate from
this single zone was approximately 1,125 bopd plus gas. A full scale production
test has yet to be fully completed. Global anticipates announcing results
periodically throughout the remainder of the testing process.


The Company experienced production outages within the two producing fields of
its Alcaravan contract in Colombia from the beginning of February through to
early March related to temporary surface equipment repairs and downtime. As of
mid March 2006, production levels were returned to normal and as of today
production is running at improved levels.


Since mid March 2006 production has been positively influenced by the successful
improved recovery programme underway within the Colombian Bocachico contract.
The Company commenced the pilot test phase of a cyclic CO2 injection project in
late 2005 on the premise that the effect of CO2 injection would be to swell the
oil in place thereby reducing its density and viscosity, improving overall oil
mobility and potentially increasing production and reserve recovery rates.
Global successfully injected 311 tons of CO2 into the Torcaz 2 well and this
well absorbed the CO2 for two weeks and was then opened to production. The
improved production rate from this well is in-line with the forecasts contained
within the engineering feasibility study conducted by Ryder Scott prior to the
project's implementation.


Since the beginning of the year production from the Colombian Los Hatos and
Bolivar contracts has been stable and in line with management's expectations.


The management's production expectations for the year have been formulated using
the independent Ryder Scott reserve report dated 31 December 2005 which
forecasts total 2006 production, net to Global, of approximately 500,000 barrels
of oil. Production net to Global on an annualized basis is at this point below
management's expectations for the year. However, due to ongoing activity as
detailed above the management expects the shortfall in production to be made up
during the remainder of the year.


Exploration


Within the Colombian Caracoli contract, reprocessing of vintage seismic test
lines has yielded favourable results and will now allow full scale reprocessing
of all existing seismic data. The Company is planning an initial seismic program
designed to further define the Tasajero anticline located on the west side of
the Caracoli contract area. It is anticipated that the seismic program be
executed in the second half of the year and will provide sufficient information
to select a drilling location that will adequately test the Tasajero prospect in
the first half of 2007.


A program to delineate the El Miedo field within the Colombian Luna Llena
contract, involving the acquisition of new seismic and the drilling of at least
two wells, is currently being designed. It is expected the delineation program
design will be completed within the first half of the year and logistical
operations to deliver and supply the necessary equipment to the El Miedo field
area will commence early in the second half of the year.


Evaluation of geologic features similar to the El Miedo field is now underway
throughout the Valle Lunar Technical Evaluation Agreement area. Specific
features have been identified and further data acquisition and analysis is
currently being planned.


The design of the seismic acquisition program for the Bretana field area within
the Peruvian Block 95 Area contract has been completed and submitted for the
necessary environmental review process. The Company will soon begin preparing a
tender to solicit bids from qualified seismic acquisition contractors with an
expectation that seismic will be acquired in the second half of 2006.


The Panamanian government is currently reviewing an advanced draft contract for
the Garachine Block Area which will convert the Technical Evaluation Agreement
into a long-term contract. Final completion of the contract is expected within
the first half of this year.


Capital expenditure in 2006 is currently projected to be approximately $23
million as per the Ryder Scott reserve report. This figure may be revised
downwards during the year if delays in scheduling equipment continue.
Conversely, it may alter upwards if the results from the Tilodiran 2 well prompt
the Company to accelerate the drilling of additional wells on the Rio Verde
contract area in the second half of 2006.


Managing Director's Overview


Commenting on Global's operations to date in 2006, Stephen Voss, Managing
Director of Global Energy Development PLC, said:


"The independently reported reserves indicate the vast potential of the Company
and scope of the individual exploration projects being developed. The projects
provide us with a very active drilling programme over the next few years.


Although we are frustrated with the mechanical problems and continuing delays in
scheduling equipment that have hampered our production growth so far in 2006 we
remain hopeful of remedying these problems and confident of building on
production elsewhere within our portfolio.


We are currently testing one of several potentially productive formations within
the Tilodiran 2 well. Even though a full scale production test has yet to be
fully completed, the Upper Massive Ubaque is naturally flowing 16 API gravity
oil at a rate of approximately 1,125 bopd plus substantial, unmeasured natural
gas. The Company has installed a 48/64ths choke in order to restrict the flow
rate to match the available surface processing and storage equipment. We are
encouraged by this early result and will test each of the remaining prospective
zones over the next few weeks in order to assess the aggregate production rate
potential of this well.


Global is also encouraged by the early production test data obtained from our
C02 improved recovery project located in our Torcaz field. The Torcaz 2 well is
responding in line with previous expectations and additionally, the Torcaz 3
well is showing evidence of C02 recovered in association with formation oil
indicating more effective reservoir continuity than anticipated of the Mugroso
producing formation. If this proves to be the case it will provide further basis
for the expansion of our C02 program in the Torcaz field.


Global continues to be convinced of the high potential of its portfolio of
contracts."


This announcement has been reviewed by Ryder Scott.


For further information:


Global Energy Development PLC
Catherine Miles, director of Investor Relations         +44 (0) 20 7763 7177
www.globalenergyplc.com                                 +44 (0) 7909918034




Notes to Editors:


Oil and Gas Reserves

Proven and probable oil and gas reserves are estimated quantities of
commercially producible hydrocarbons which the existing geological, geophysical
and engineering data show to be recoverable in future years from known
reservoirs. The proved reserves reported by Ryder Scott conform to the
definition approved by the Society of Petroleum Engineers ("SPE") and the World
Petroleum Congress ("WPC"). The probable and possible reserves reported by Ryder
Scott conform to definitions of probable and possible reserves approved by the
SPE/WPC using the deterministic methodology.


Global

Global has been listed on the AIM Market of the London Stock Exchange since
March 2002 (LSE-AIM: "GED"). The Company currently holds approximately 5.2
million acres through eight contracts in Colombia and Peru, an exclusive
Technical Evaluation Agreement ("TEA") in Colombia and a concluded exclusive TEA
in Panama. Global's portfolio comprises production, developmental drilling and
workover opportunities and several high-potential exploration projects.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
MSCKDLFLQXBZBBK

Global Energy Development (LSE:GED)
Historical Stock Chart
From Sep 2024 to Oct 2024

Global Energy Development (LSE:GED)
Historical Stock Chart
From Oct 2023 to Oct 2024