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EMERALD RESOURCES NL — Capital/Financing Update 2007
Aug 12, 2007
64849_rns_2007-08-12_cb59d1d1-a13e-4467-9826-0af2a43ec707.pdf
Capital/Financing Update
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Level 2, 16 Altona Street West Perth WA 6005 Ph: 08 9482 0500 Fax: 08 9482 0505 Email: [email protected] www.emeraldoilandgas.com
13 August 2007
Centralised Company Announcements Platform Australian Stock Exchange 10[th] floor, 20 Bond Street Sydney NSW 2000
VALENTINE 1 EXPLORATION WELL SPUDS
Emerald Oil & Gas NL (“Emerald”) has been advised by ARC Energy Ltd that operations at the Valentine 1 exploration well, operated by ARC Energy and located in the onshore Canning Basin Permit R1, commenced at 1230 hours WST on 12 August 2007, using the Century 18 drilling rig. Current operations at the well are drilling ahead at 115mMD in a 444mm diameter hole.
Valentine 1 is located approximately 20 kilometres north of the township of Derby in northwest Western Australia’s Kimberley region. The primary reservoir objective is the Late Devonian aged Virgin Hills Formation. Valentine 1 is designed to intersect the interpreted Virgin Hills sandstones and carbonates near the structural crest of the prospect. The well will be drilled deviated to the 244mm (9 5/8”) casing point at approximately 800 metres measured depth, building to a maximum hole angle of 20[O] . The Valentine 1 well will then be drilled to return to vertical at the top of the main objective section at approximately 3,220 metres measured depth. The deviation at 800m will accommodate the planned subsequent sidetracking operations required to drill the Stokes Bay 1 well, which will be drilled immediately after Valentine 1.
The Valentine prospect is a large lowside fault closure that is mapped in both the EP104 and R1 permits and extends over an area of some 66 square kilometres along the Pinnacle fault system. The Valentine reservoir objective is interpreted to be a slope fan / marine sand body which has a very distinctive seismic signature. The principal risk on the prospect is interpreted to be the stratigraphic updip seal mechanism, but the distinctive seismic signature of the objective section and the proven good petroleum source potential of the underlying Gogo Formation shales, together with the large potential hydrocarbon volumes, make it an attractive target.
The Stokes Bay 1 well is planned to be drilled by sidetracking from the Valentine 1 wellbore after the completion of drilling operations at Valentine 1. Stokes Bay 1 is planned as a test of the extent and reservoir development of the gas accumulation intersected by the Point Torment 1 well and will be drilled as a deviated well with a total depth of approximately 2,500 metres. Point Torment 1 was drilled in 1992 and subsequently flowed gas at a rate of up to 4.3 million cubic feet of gas per day from the Carboniferous aged Anderson Formation sandstones. Subsequent tests of these sands produced ambiguous information on potential volumes and reservoir quality and the Stokes Bay 1 well is designed to provide a definitive test of the reservoir quality and extent of the accumulation.
Final interests in R1 and EP104 post the Valentine 1 well farmin earning program are:
| ARC Energy Limited (Operator) | 38.95% |
|---|---|
| Empire Oil and Gas NL | 14.8% |
| Emerald Oil & Gas NL | 12.75% |
| Pancontinental Oil & Gas NL | 10% |
| Phoenix Resources PLC | 10% |
| First Australian Resources Limited | 8% |
| Indigo Oil Pty Ltd | 5.5% |
Emerald Oil & Gas NL is earning 12.75% interest in EP-104 and R-1 blocks by paying 13% of the drilling costs and any completion costs of the Valentine – 1 well. Emerald will pay 12.75% of the drilling costs of the Stokes Bay – 1 well and 13% of the completion costs should Valentine not be completed as a discovery well.
A discovery at the Valentine or Stokes Bay prospects will greatly enhance the value of Emerald’s 100% - owned permit application block EPA 4/05-6 located immediately west of EP 104 (as shown on Figure 1). EPA 4/05-6 covers approximately 70 kilometres of the Pinnacle Fault system which is considered to be a key structural element for the migration and entrapment of hydrocarbons in this portion of the Canning Basin.
Emerald has the highest leverage to a successful outcome from these two prospects with only 62.35 million shares and 35.63 million listed options on issue. Emerald estimates that a discovery could add several million barrels of oil equivalent resources, net to Emerald.
Technical details of the well are contained in the well summary sheet, below:
VALENTINE DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA
| Date: | 13 August 2007 | 13 August 2007 | 13 August 2007 | 13 August 2007 | |
|---|---|---|---|---|---|
| Permit: | R1 | ||||
| Well Location: | Lat : 17o08’ 23.46”SLong: 123o42’ 32.40”E | ||||
| Directional offset totarget: | 0 metres | ||||
| Elevation: | Ground Level is 12.1mAMSLRotaryTable is 17.8mAMSL | ||||
| Prognosed Depths | Top primaryobjective | Total depth | |||
| (measured KB): | |||||
| 3,222 metres | 3,407 | metres | |||
| Prognosed drilling time: | 25 days | ||||
| Spud Date: | 1230 hrs WST 12 August 20 | 07 | |||
| Present Depth: | 115 mMD | ||||
| Time of Reporting: | 0600 hrs,WST 13 August 20 | 07 | |||
| Operations Since LastReport: | N/A | ||||
| Current Operations: | Drillingahead. | ||||
| Hydrocarbonindications: | N/A | ||||
| Comment: | N/A |
For more information please contact:
Emerald Oil & Gas NL
Tel: +618 9482 0510 www.emeraldoilandgas.com [email protected]
JOHN HANNAFORD Executive Director – Finance [email protected]
BOB BERVEN Executive Director – Technical [email protected]
About Emerald Oil & Gas NL
Emerald Oil & Gas NL (ASX: EMR; EMRO) was listed on the ASX in June 2006, raising $4 million. Emerald is an oil and gas exploration and production company with project interests in North Dakota and Texas in the USA and in the Canning Basin of Western Australia. Emerald’s focus is on conventional reservoir targets for oil and gas prospects and its primary objective is to achieve near term production and cashflow to build shareholder value and provide funds to fuel further growth. Emerald’s strategy is to take modest but meaningful positions in low risk exploration projects that can be swiftly brought into production.
Information in this announcement pertaining to exploration potential was compiled by Robert Berven, Emerald Oil & Gas NL’s Technical Director who is a Member of the Australasian Institute of Mining and Metallurgy and the American Association of Petroleum Geologists CPG # 2498.
Statements regarding Emerald’s plans with respect to its petroleum properties are forward-looking statements. There can be no assurance that Emerald’s plans for development of its petroleum properties will proceed as currently expected. There can be no assurance that Emerald will be able to confirm the presence of additional petroleum deposits, that any discovery will prove to be economic or that an oil or gas field will successfully be developed on any of Emerald’s petroleum properties.
FIGURE 1 - PERMIT MAP – CANNING BASIN
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----- Start of picture text ----- LocationValentine -1;Stokes Bay -1----- End of picture text -----
Canning Basin showing Emerald’s EP104 / R1 (yellow) and EPA 4/05-6 (green) interests, and mapped prospects and leads. The main feature on both leases is the Pinnacle Fault, the source of much of the previous hydrocarbon production in the Canning Basin.