Sea Dragon provided the following update on its operations in Egypt.
Kom Ombo Concession
The Al Baraka #7 well drilled, logged, cased and completed in 12 days showing a significant improvement in rig performance. Log analysis showed a net pay thickness in the Abu Ballas Formation of 28 feet. The well was perforated in the Abu Ballas interval 3634-3662 feet and is
now undergoing testing operations. Testing results should be made available shortly. This well appears to be a candidate for a fracture treatment. The drilling rig will now move to drill the Al Baraka #9 well, expected to spud this week.
Of the seven wells drilled in the Al Baraka field to date, four have been selected for fracturing treatments. Once these stimulation operations are completed and Al Baraka #9 and #11 are drilled, production is expected to reach 2000 bopd, over two fold increase from current levels.
A completion/work-over rig has now been selected. Contract negotiations are currently underway and the rig is expected to be mobilized along with the fracturing units to the Al Baraka field by the end of August.
The 477 km 2D seismic program to delineate and firm up eight prospects and leads was completed on July 23rd. Processing has already commenced with the view of potentially drilling an exploratory well before year-end.
Sea Dragon has a 50% working interest in Jointly Operated Kom Ombo Block with Dana Gas Egypt owning the remaining 50%.
NW Gemsa Concession
The original heavy oil discovery well, the Al Amir-1X was re-entered, completed and tested at 300 bopd. The well is producing from the South Gharib Formation at a depth of 4750 feet. Produced oil is relatively heavy 18 degree API. Geological interpretation of this field is ongoing in view of the heavy oil shows seen in the Al Amir SE#6 well some three kilometers distance from the Al Amir-1X.
The Al Ola X-1 well spudded on July 15th and is currently drilling at 8000 feet. This well is expected to reach a depth of 13,700 feet. This well is being drilled as an exploratory well outside the southern boundary of the Al Amir SE development lease. It is intended to capture a southern extension to the Al Amir SE oil field. The primary objectives are the Rahmi and Shagar Kareem sands currently producing in the Amir SE oil field. The well will also test a secondary objective in the Lower Rudeis Formation where gas and condensates were tested in the Al Amir SE #6 well. Should the Lower Rudeis Formation be productive, consideration will then be given to deepen the well to 15,000 feet to test the Nubia Formation.
Production from the Al Amir, Al Amir SE and Geyad fields in the NW Gemsa Concession is holding steady at 9500 bopd.
Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas Oil at 50% as operator and Circle Oil Plc. with 40%.
Commenting on these latest developments on our operations in Egypt, Company Chairman and CEO Mr. Said Arrata stated, “I am encouraged by the way drilling operations are being accelerated. The pace of our development activities should be further enhanced by the deployment of the service rig. I am also confident that once stimulation work is completed on Al Baraka wells, significant production increases will materialize.”