Petroceltic International has issued an update on operations update at the Ain Tsila field on its Isarene permit (Blocks 228 & 229a) in south eastern Algeria.

AT-5 Well Test

The AT-5 well was drilled with a 376m of horizontal section through a "pop-up" feature in the Ordovician reservoir at a location about 4km to the east of the AT-1 discovery well. A multistage open hole packer completion with four zone isolation ports was successfully run before the well was suspended for rigless testing. All four zones were then fracture stimulated ("fracced") and a maximum flow rate of 3.50mmscf/d on a 64/64" choke with 60 bbl/d of condensate and 190 bbl/d of water was achieved. While the flow rate is lower than pre-test expectations, this is the third of four wells tested in the Ain Tsila discovery to flow at rates that are likely to be deemed commercial.

Upon completion of the operations at the AT-5 site, the rigless testing unit will be mobilised to the AT-6 location to commence testing operations there. The testing programme at AT-6 is expected to be completed in the first half of September.

Appraisal Drilling Update

Well AT-7, which is being drilled by the Dalma rig and is located in the south west of the field outside the 3D seismic survey approximately 10km south of the AT-3 well, commenced drilling on 26th July. It is designed as a vertical well to test the south westerly extension of the field and will be the 4th well in the current campaign.

Well AT-8 which is being drilled by the KCA Deutag rig started drilling on 19th July. This well is being drilled as a vertical well into a "pop-up" feature in the north of the field. The objective of the well is to further delineate the northern part of the field and test a potential fracture zone associated with a seismically mapped fault which may facilitate enhanced productivity rates. It will be the 5th well in the current campaign.

The Algerian Authorities have also recently approved the drilling of the 6th well, AT-9. This well will be the second well with the KCA Deutag rig following completion of drilling operations at AT-8. It is located in the centre of the field between wells AT-1 and AT-2 and will be drilled as a horizontal well designed to test a structurally different style of "pop-up" with seismically interpreted fractures and faults.

With the addition of the second rig, the current six well delineation programme will be completed by year end to allow for the preparation of the Final Discovery Report for submittal to the Algerian authorities by the end of Q1 2012.

Petroceltic operates the permit with a 56.625 % interest, Sonatrach holds a 25% interest, and Enel holds 18.375% interest, pending final Government of Algeria ratification.

Brian O'Cathain, chief executive of Petroceltic commented: "While we are disappointed that the AT-5 flow rates did not meet our pre-test expectations, the well has achieved a commercial flow and provided important operational data in respect of the future design, drilling and testing of appraisal and development wells in the AinTsila Field. This is the third of the four wells tested to date to flow commercial rates of gas and further demonstrates the extent and scale of the discovery.

Operational activity is now at a peak with two rigs and a rigless testing unit currently active in the field and we await with interest the results of the remaining wells in this current campaign."

Tags: Petroceltic International plc