Earnings Release • May 7, 2014
Earnings Release
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National Storage Mechanism | Additional information
RNS Number : 4092G
Indus Gas Limited
07 May 2014
For Immediate Release 7 May 2014
Indus Gas Limited
('Indus' or 'the Company')
Operational Update
Indus Gas Limited (AIM:INDI.L), an oil and gas exploration and development company with assets in India, is pleased to announce progress on the following operational matters concerning the RJ-ON/6 Block:
Drilling
The current drilling programme is progressing on schedule and producing positive results. The programme has been designed to achieve two key objectives. Firstly, additional production wells have been drilled in the SGL area of the Block to service gas sales commitments and secondly, appraisal drilling and testing has continued in the southern half of the Block.
In the first four months of this year additional testing of a number of wells in the SGL area has also been completed. This testing has focused primarily on the Pariwar formation and the results further support the coverage of both P10 and P20 Pariwar gas production potential across the Block.
Some of the key wells drilled since the last operational announcement are summarised below:
TIRATH # 2 (3474m) Appraisal Well
Tirath-2 is located 14 km to the northwest of the SGL development area in the extreme northern part of the RJ-ON/6 block area. The well was drilled to 3474m covering the entire target interval of the B & B formation. Strong gas shows were encountered during drilling in B & B reservoir sands. The well has been completed and is due for perforation and further testing work.
Based on wireline log and gas data multiple intervals have been identified as potential zones for gas flow in the target B & B sands in this well.
EPN # 1 (3357m) Appraisal Well
Well EPN # 1 is situated in the western part of RJ-ON/6, 9 km to the south of the SGL development area. The well terminated in the lowermost part of the P-10 reservoir zone of the Pariwar formation. Multiple gas shows were encountered during drilling throughout the Pariwar section. To date this well has been perforated in the P-10 reservoir zone section and successfully tested gas to surface with a recorded FTHP of 2,175 psi through an 8mm choke at a producing rate of 3.246 mmscf/d. There are several other zones available which can be taken up for testing and production at a later stage of well life.
A-11-7 (3519m) Appraisal Well
Well A-11-7 falls outside of the SGL Development area (approx. 3 km to the south) in the western part of RJ-ON/6 and terminated in the lower section of the Pariwar P-10 reservoir zone. Several gas shows and drill breaks were observed whilst drilling in the Pariwar formation. Based on wireline logging and gas shows this well was perforated in the P-20 (upper) reservoir sand zone of the Pariwar formation. The well has successfully tested the flow of gas to surface, with a recorded FTHP of 1500 psi through an 8mm choke at a producing rate of 2,776 mmscf/d.
SX # 4 (4427m) Appraisal Well
This well is located in the south-western part of the RJ-ON/6 block 24km to the south of the SGL field development area. The well terminated in the basal parts of the B & B formation. During drilling, good shows were encountered in the Pariwar and B & B formation target zones. An open-hole DST in the Pariwar formation has flowed gas to surface with a recorded FTHP of 100 psi through a 1/4" choke. Given the tight nature of the formation (particularly the B & B target zones) this well is also being completed with very high grade special thread casing to enable hydro fracturing stimulation work to fully assess the gas flow potential from key target zones. During drilling, core samples from gas bearing target sands of the upper B & B formation have been recovered from this well to allow further analysis in order to establish the properties of the B & B reservoir rock. A core study is being carried out at the Weatherford laboratory in Houston with the aim of developing and improving hydro fracturing techniques to assist with exploiting the potentially large gas resources from the tight B & B formation target sands in this area.
SX # 6: (4487m) Appraisal Well
This SX # 6 well has been drilled to 4,487m penetrating the entire Pariwar formation and all key target zones down to the lowermost sands of the B & B formation. The well is located in the south-western part of the RJ-ON/6 block around 18 km to the south of the SGL Field development area. During drilling good gas shows and drill breaks were observed in the upper and lowermost sand of the B & B formation. This well is being completed using very high grade special thread casing as it will be further assessed and targeted for hydro fracturing stimulation to fully appraise the flow potential of gas from the B & B formation reservoir zones.
SGL # 14 (3359M) Development Well
SGL # 14 was drilled in the western part of the SGL development area & terminated in the lower section of the Pariwar P-10 reservoir zone. The well encountered good gas shows during drilling in P-10 and P-20 zone target sands of the Pariwar formation. Based on wireline log data and gas data review this well is currently perforated in the P-10 sand zone and successfully tested a flow of gas to surface with a recorded FTHP of 1660 psi through an 8 mm bean at a producing rate of 3.219 mmscf/d. This well has also penetrated several other gas bearing zones in the Pariwar formation which can be considered for testing at a later stage of well life.
Significantly, the SGL #14 well is drilled in the 3P area of the SGL field and consequently the 1P and 2P areas of the SGL field are expected to increase following the success of this well. Review is ongoing at the time of writing.
Seismic
We currently have 87.2% of 3D seismic coverage of the 2,000 km2 DOC area. Since the 2013 Annual Report was published a further 113.17 km2 of 3D seismic data has been acquired and processed. Work is ongoing to complete the seismic data set to cover the entire 2000 km2 DOC area.
Other Matters
Facilities
Strong progress has been made on the preparation of additional gas gathering and processing facilities. A cumulative gas processing capacity of 130 mmscf/d is being planned to be available by 2015 to provide a strong platform from which to negotiate further new gas supply contracts.
Competent Person's Report (CPR)
Senergy is currently working on a new CPR and this report is expected to be released during the third calendar quarter. This will be the third CPR produced by Senergy with continuity of personnel working on the RJ/ON/6 Block in all three reports.
Declaration of Commerciality ('DoC')
The Declaration of Commerciality submitted in November 2013 for a circa 2,000 square kilometre area is under review with ONGC and other Regulatory Authorities.
Debt Financing
Progress continues to be made on the new US $180m facility and the next major step is to complete the documentation process.
Board Composition
John Behar will complete two three-year terms in June 2014 and John will step down from the Board at this time. The Board wishes to sincerely thank John for his contribution to the development of Indus. A process of appointing a new Non-Executive Director is ongoing.
Mr Peter Cockburn, Chairman of the Company commented:
The Company continues to make excellent operational progress. The current drilling campaign is delivering some very exciting results and the Board looks forward to the release of the updated Competent Person's Report during the third calendar quarter.
Since flotation in June 2008, Indus Gas has enjoyed prolific exploration success translating into the rapid growth of the Company's underlying reserves base. Whilst the recent weakness in our share price is disappointing the Company will continue to channel its energy into the appraisal, development and monetisation of the block with the single objective of maximising shareholder value.
In accordance with AIM rules, Paul Fink, Technical Consultant, a Geophysicist who holds an engineering degree from the Mining University of Leoben, Austria and has 24 years of industry experience is the qualified person that has reviewed the technical information contained in this release.
ENDS
For further information please contact:
Indus Gas Limited
Peter Cockburn +44(0)20 7877 0022
John Scott
Arden Partners plc
Richard Day +44(0)20 7614 5917
BellPottinger PR
Philip Denis +44(0)20 7861 3919
Elena Dobson +44(0)20 7861 3147
This information is provided by RNS
The company news service from the London Stock Exchange
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