The drilling operations at the Borkathani exploration location in AA-ON/7 exploration block in North East India has begun. The drilling has been planned up to the basement level at a depth of 1600 meters. This location will test Cretaceous sands approximately 8km and 200m structurally up-dip from the Dergaon gas discovery well.
The second drilling rig is being mobilized at Amguri 12. Since this is a brand new rig which requires additional time to commission, drilling operations are expected to begin from end June or early July,2008. The rig will be positioned on a large drilling pad designed for multiple wells.
Drilling Update :
The Company in consortium with Canoro has initiated 20 well drilling program with success at Amguri 13B, not yet tested, in April,2008. The entire drilling program is expected to be completed over the next 18 months based on drilling schedules drawn for Amguri and AA-ON/7 by deployment of existing contracted rigs. The drilling program has been planned with due consideration of low risk appraisal, development drilling and high risk exploration drilling.
Seismic Update – AA-ON/7 :
The interpretation of newly acquired and processed of additional 40 km of 2D seismic obtained over the foothills to delineate and confirm prospects identified earlier has been completed. This interpretation has given lead to atleast one well planned to begin drilling in the first quarter of 2009.
Production Update :
Evaluation of the main pool at Amguri 10B and 11 has determined that the best reservoir management technique, which also creates incremental economic value, is the recycling of the produced natural gas in combination with the gas plant. The benefits of this analysis and approach are manifold as enumerated as under :-
- Increased liquids (condensate and liquid petroleum gas) recovery factors from the reservoir offsetting lost natural gas production.
- Receive international price for all liquids production, rather than the current below international price of gas.
- Fewer wells required for ultimate recovery, reducing overall capital expenditures.
- When the gas is no longer required to be cycled for reservoir management, it is anticipated that the gas markets should be significantly improved in terms of price, demand and infrastructure.
The consortium is evaluating the construction of a modular gas plant which will strip out propane and heavier liquids from the natural gas stream for which front end engineering for this plant has already begun.
Amguri 10B & 11 wells are on production from end January 2008 and the gross gas production from these two wells of Amguri has been increasing to between 6.0 – 7.0 mmcf/d and 500-550 bbl/d of condensate. Assam Company’s share of production is currently about 700 boe/d. Production from Amguri 6, 10B and 11 has been planned to be maintained at this level until commissioning of the gas plant which is expected to take approximately two years. Liquids production at Amguri should increase from October / December 2008 from Amguri 5 and 13B depending on testing results. The consortium also anticipate additional production from new wells to be drilled and on stream when facilities are completed.
Discussions are on with Government of Assam and their state-owned Assam Gas Company Limited for upward revision of the price for the natural gas being sold from Amguri considering significant increase in price at the international level. The Amguri block is entitled to seven year Tax Holiday on production of oil and gas from April,2006. In addition, any new revenue streams associated through the processed gas plant would also be subject to Tax Holiday beginning from the date of commissioning of the plant.
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