2.0        AMGURI – Developed Block Amguri Block is located in Assam and covers 52.75 Sq.Km.  This block is a Developed Block and has potential of 2P recoverable resources as per report of Sproule dated October 28, 2007 and as mentioned in this report. 2.1        Resource Assessment Sproule is an internationally recognized and specialized body engaged in making resource/reserve assessment in Exploratory and Developed fields.  Its certification on resource / reserve in Exploratory and Developed Amguri fields is internationally accepted. Resource estimate for Amguri field was conducted by m/s Sproule in 2006.
BEST ESTIMATE   OIL GAS   OOIP MMbbls Recoverable Oil MMbls OGIP Bcf Recoverable Gas Bcf Amguri 152 50 294 167
2.2        Reserve Assessment Sproule has submitted its Reserve Assessment Report as of 31st March, 2009 pertaining to the wells already drilled and assigning few more new wells in the same zone.  The report has indicated 2P reserve of oil condensate and gas at 12.287 million Boe which indicates significant upside in reserve potential.  However, this reserve figure does not cover the entire field of Amguri. 2.3        Drilling This field, which is a developed block, has been producing oil & gas since April 2006 from two wells, i.e. well No.5 and No. 6.  Besides well No. 8A also produced gas but the same has been put on suspension temporarily due to facilities constraint and other technical issues.  Subsequent consortium of CRL and ACL has drilled five more wells - 10(A&B), 11, 12, 13(A&B) & 14. The activity has come up with mixed results. Wells 10B, 11, 13B & 14 have established pressure of additional oil & gas and sustained. Surface flow of oil / gas has been confirmed in 10B, 11 & 14. Well no. 12 has adverse results.

2.4        Production

Well 5 has been temporarily put on hold to carry out further work over operation to take care of some technical issues for maintaining the health of well and to enhance the production.  It is expected that well 5, which was earlier producing about 100 bbls per day, will be back in production stream in the immediate future.

Well 6, 10B and 11 are producing about 300 bbls of oil and 1,30,000m³ of gas per day, which is about 1000 boe per day.  The production will further enhance once adequate facilities are created and further wells are drilled.

There is an immediate scope for enhancement of production by bringing the gas well A # 14 into production, to meet the additional requirement of APGCL. There after enhancement of gas / condensate production is planned through implementation of gas compression and injection system through dual completion in Amguri #11. This gas injection process will also optimize the recovery of gas condensate from Amguri field.

2.5        Future Plan

In norder to reduce the risk of drilling of approved wells, the 3D data of Amguri field is being subjected to special processing and implementation.

2.6      Quality of Oil

The quality of the crude oil being produced from this Block is superior to “Bonny Light” crude which is the identified benchmark evaluation for Indian crude oil for international price and has been certified by Indian Oil Corporation.  The consortium gets premium US$ 4-5 per barrel over Bonny Light Crude due to its superior quality.
 
2.7      Development Plan 

On completion of the phase of appraisal drilling and integrated development plan is to be formulated. This would facilitate significant enhancement in the production of oil gas condensate of Amguri field through drilling of additional wells and by creation of associated facilities.

In this Block, ACL has a participation interest of 40% whereas CRL has 60%.

3.0      AA-ON/7 – Exploratory Block

3.1      This block presently covers and area of 319 sq km covering the State of Nagaland.  The consortium of CRl and ACL has conducted 145 LKM seismic data with an investment of over USD 4.00 million covering areas within  Assam and Nagaland. These areas have been identified as the most resourceful / prospective zone for further exploratory activities.  The consortium plans to undertake exploratory drilling on processing and interpretation of seismic data .  The consortium has basis of acquired an additional 42 LKM seismic study during 2007-08.

3.2     The consortium has already drilled four exploratory wells. Workover operations have also been conducted in one well.Though, there has been Oil & Gas show during the drilling operation, the commercial viability is yet to be established.

3.3     The Government of Nagaland had issued PEL in 2006 for E&P activities in the State of Nagaland.  This will allow the consortium of CRL and ACL to pursue E&P Exploratory activities in the State of Nagaland during the period of next seven years.  Both CRL & ACL are quite upbeat in E&P activities in Nagaland considering highly prospective zone.

Sproule as per their report dated 24th May,2006 has indicated 2P resource assessment as per table given below:

BEST ESTIMATE

3.4     The consortium has submitted the proposal of extension of Exploratory phase to DGH and obtained in principle approval.  During 2008-09, the consortium has committed minimum work program with an investment of US$ 17.30 million approximately, out of which, the Company’s share will be about US$ 6.05 million.  Three Exploratory wells have been planned during 2008-09.Considering drilling work programme, a separate Rig has been deployed by the Consortium.

4.0     Addition to exploration portfolio

As a part of its aggressive plan for extension of exploration portfolio, ACL along with Oil India Limited and ONGC has successfully bid for a block AA-ONN-2005/1 in Assam Arakan basin; one of the well recognised petroliferous areas of the country. Exploration work is to start, awaiting PEL from the Assam Government.

4.1    Strategy

The Company has already planned to expand its oil assets portfolio by acquiring more assets either through acquisition or through bidding process optimizing proper mix of producing and Exploratory Blocks.  With this strategic approach, the Company will be able to maximize the revenue in a short period of time.  The Company’s E & P activities in Oil & Gas Sector has taken a quantum jump and looks forward to significant cash flow generation and enhancement of shareholders’ value in coming years. 

 December, 2009