TIDMGED
RNS Number : 5795M
Global Energy Development PLC
19 September 2012
Immediate Release 19 September 2012
GLOBAL ENERGY DEVELOPMENT PLC
(the "Company")
UPDATE ON DEVELOPMENT AND OPERATIONAL PROJECTS
Global Energy Development PLC, the South America focused
petroleum production and development company (AIM: GED), with
operations in Colombia, South America, announces the following
update regarding its ongoing development and operational projects
in the Middle Magdalena Valley and the Llanos Basin.
BOLIVAR Contract Area - Oil Shale - Middle Magdalena Valley
The Company is continuing with its plans to hydraulically
fracture the La Luna formation in the existing Olivo #2 well, which
is expected to take place during late 2012 or early 2013, depending
on the availability of equipment within the country from
third-party service and equipment providers. The La Luna formation
shares similar geological characteristics to the Eagle Ford shale,
and historical drilling in our Contract area has produced a
significant amount of oil and gas.
Several major international companies have recently shown
significant interest in the Bolivar Contract area, with Shell
E&P - Colombia and ExxonMobil Exploration Colombia Limited both
announcing partnerships in block areas adjacent to the Company's
Contract area. The Company may also consider partnering with
highly-experienced operators in order to accelerate the development
of our reserve base and increase shareholder value.
TORCAZ: CHOPS - Torcaz Field, Middle Magdalena Valley
CHOPS (Cold Heavy Oil Production with Sand) Project
As part of our strategy to increase production from the large
reserve base in our Middle Magdalena properties, work began on the
Torcaz 5 well within our Bocachico Contract area in mid-July. A
progressive cavity pump was installed at a depth of approximately
7,900 feet below the perforations in the formation to re-establish
oil (and sand) production and lift from the wellbore. During the
testing phase of this pump, successful sanding and oil shows were
initiated. However, oil shows were interrupted due to periodic
significant sand movement into the wellbore, which eventually
overwhelmed the capacity of the pump. As a result it became evident
that a modified approach, combining the CHOPS process and the
partial application of conventional sanding restraints, should be
utilised to moderate sand production and enhance oil production.
The Company hopes to commence this process in October and planning
efforts are currently underway.
Although considered a setback, this was the first attempt at
implementing such technology at the Torcaz field and it is not
surprising to see some short-term calibration and engineering
issues at this early stage. The initial results are nevertheless
encouraging and the Board believes that this process, in a modified
form, can help to substantially accelerate production of the
Company's reserves in the Torcaz field.
RIO VERDE PRODUCTION - Tilodiran Wells, Llanos Basin
The Company's focus for the Llanos Basin is to maximise
production volumes, decrease operating costs and utilise cash flow
from operations to further develop projects within our Middle
Magdalena Valley contract areas (Bocachico and Bolivar Association
Contracts). Our original targets for the six months ended 30 June
2012 (the "Period") for the Llanos Basin properties were the
recompletion of the Tilodiran #1 well to re-establish oil
production and the conversion of the Rio Verde #2 well to water
injection well in order to significantly reduce water
transportation and disposal costs within the Rio Verde Concession
Contract area.
As previously announced, the original timing of these projects
was delayed because, during early 2012, the Company was forced to
perform workover operations to replace a failed pump within the
wellbore on its Tilodiran #2 well, located within the Rio Verde
Concession Contract area. Shortly after this work was completed, in
May 2012, the electric submersible pump ("ESP") failed again. Upon
recovery of the failed pump, the well was stimulated and an ESP
from a different vendor was installed at a shallower depth of 8,000
feet. This subsequent workover operation was completed in mid-June.
The Tilodiran #2 well is now online and producing at stable rates
of approximately 350 gross barrels of oil per day ("bopd").
Although gross production decreased by 17% from 244,040 bbls in the
period compared to 202,247 bbls for the first half of 2011 due to
the more than 120 days of downtime of the Tilodiran #2 well,
underlying oil rates have remained fairly consistent. Following
completion of the workover, the Company's average gross daily
production has been steadily averaging between 1,700 bopd and 1,800
bopd.
In July, following the completion of the workover of the
Tilodiran #2 well, the Company completed the conversion of the
inactive Rio Verde 2 to a water disposal well. The Company
successfully concluded short-term water injection tests at Rio
Verde #2 and has submitted the test results to the Colombian
Ministry of Mines and Energy. Final approval from the Colombian
authorities to re-commence water injection at Rio Verde #2 is
expected in September 2012. As the Company transports and disposes
of more than 120,000 barrels of water each month from its Tilodiran
field, we anticipate that this disposal well will save an average
of $4.00 per barrel of water transportation costs per month,
translating into significant cost savings for the Company.
For further information please contact
Global Energy Development PLC
Anna Williams, Finance Director +001 817 310 0240
awilliams@globalenergyplc.com
www.globalenergyplc.com
Buchanan (Financial PR)
Tim Thompson +44 (0)20 7466 5000
Ben Romney
Northland Capital Partners Limited
+44 (0)20 7796
Louis Castro 8800
Lauren Kettle
Westhouse Securities +44 (0) 20 7601 6100 Petre Norton
Andrew Matharu
Notes to Editors:
About CHOPS (Cold Heavy Oil Production with Sand)
CHOPS is a proven technique used by the Canadian oil industry of
extracting heavy crude oil where sand production is encouraged as a
means of enhancing well productivity using abrasives tolerant
pumps. Using abrasives tolerant pumps, substantial production rate
improvements over non-CHOPS techniques have been reported. The
Company has 2P oil reserves of 67 million BOE (57% of Global's 2P
reserve base) within the Bocachico Contract area as at 31 December
2011.
About Global Energy Development
The Company's shares have been traded on AIM, a market operated
by the London Stock Exchange, since March 2002 (AIM: GED). The
Company's balanced portfolio comprises a base of production,
developmental drilling and workover opportunities and several
exploration projects in Colombia, South America.
The information contained within this announcement has been
reviewed by Mr. Stephen Voss, a Director of the Company, for the
purpose of the Guidance Note for Mining, Oil and Gas Companies
issued by the London Stock Exchange in respect of AIM companies
which outlines standards of disclosure for natural resource
projects. Mr. Voss is a Registered Professional Engineer in Texas
and has been a Member of the Society of Petroleum Engineers for 28
years.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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