Sea Dragon Energy Inc. is pleased to provide the following update on its operations in Egypt.
NW Gemsa Concession
The Geyad-3C well was spud on April 22nd, 2011, drilled to a total depth of 5,635 feet and completed as an oil producer in the Shagar member of the Kareem Formation. The well is located some 1.4 km to the southeast of the Geyad-1X ST well and 2.9 km southeast of the Geyad-2 ST well within the Geyad Development Lease. The oil bearing Shagar sands were encountered 122 feet higher than prognosis with 14 feet of net oil pay.
The well is currently undergoing testing operations, flowing oil to surface at a rate of 2,430 bopd and 2.53mmscf/d on a 32/64 choke size. The well is already connected to the Geyad production system and upon completion of testing operations, will immediately be placed on continuous production. The Belayim sands were also encountered in the Geyad-3C well with an indicated 5 feet of oil pay. The Geyad-3C has now confirmed the south easterly extension of the Geyad field.
It is the first of two wells to be drilled in 2011 in the Geyad development lease. The next well will be Geyad-5C to be located 1.1 km west-south-west of Well Geyad-1X ST and 1.4 km south of Geyad-2 ST, in the western edge of the field near the oil water contact and used as a water injector.
Al Amir SE #8 Well:
The well was spud on May 20, 2011 and is now drilling below 3,000 feet. The Al Amir SE #8 well is located 2.9 km south of Al Amir SE #7 well, and as with the Al Amir SE #7 well, is targeting the western edge of the field to be completed as a peripheral water injector.
Water injection is expected to commence in late June. This marks the beginning of the water flood project which will result in significant increase in recoverable reserves and production levels from the field.
With the Geyad-3C undergoing testing operations, current production from the Al Amir SE and Geyad fields has temporarily increased to 9,470 bopd (947 bopd net to Sea Dragon). Cumulative production from the NW Gemsa Concession has now exceeded 5.2 million barrels of 42 degree API Crude oil.
Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas at 50%, as operator, and Circle Oil PLC with 40%.
Kom Ombo Concession:
Geological, geophysical and engineering work and studies are continuing. The work includes a remapping of the Al Baraka field and exploratory prospects. This work will be complemented by the results of other geotechnical studies now underway to firm up locations for the two exploratory wells and AB-17, AB-18 and AB-19 development wells planned for the fourth quarter, 2011.
Production from the Al Baraka field is approximately 800 bopd (400 bopd net to Sea Dragon).
Sea Dragon has a 50% working Interest and is a joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50%.
Commenting on the latest developments on the Company’s operations in Egypt, Company Chairman and CEO Mr. Said Arrata stated “The success of our development drilling and delineation work in both Al Amir SE and Geyad fields in our NW Gemsa Concession is most gratifying. We are looking forward to the commencement of the water flood project and the resulting increase in production. In Kom Ombo, detailed geotechnical work is well underway in preparation for the fall drilling season”.