Petroceltic International, in association with its partner Sonatrach, the Algerian National Oil & Gas Company is pleased to issue an operational update on its Isarene permit in the Illizi Basin in South Eastern Algeria.

Well AT-4, the first of a four well appraisal campaign, was successfully drilled and completed within budget. The well commenced drilling on 16th November 2010, and reached total depth of 2142 metres on 18th December 2010, having successfully cut and recovered 48 metres of core in the objective Ordovician Unit IV reservoir sequence.

AT-4 is a vertical well located approximately 10 km to the east of AT-2 and is the first well to be drilled on the eastern flank of the field. The principal objective of the well was to determine the nature and extent of the gas in place in this previously undrilled area of the field.

The well encountered a gross gas column of 155 metres with no gas-water contact observed. Additionally, static reservoir pressure readings indicated that the main Ordovician gas reservoir in this area is in the same pressure regime as that encountered at wells AT-1, AT-2, and AT-3.

Completion operations on the well finished on 27th December 2010 when the rig was released to move to AT-5. The well has now been suspended, pending rigless fracture stimulation and flow testing over the coming month.

Appraisal well AT-5 was spudded on 9th January 2011 and has an expected drilling duration of approximately 65 days. This well is targeted at a "pop-up" feature to the north of the Ain Tsila field, where natural reservoir fracturing in combination with the near horizontal well bore trajectory may lead to enhanced productivity. The well will be drilled first as a semi-vertical pilot hole, and then sidetracked as a deviated well with a 450 metre horizontal section through the objective Ordovician reservoir.

Brian O'Cathain, Chief Executive of Petroceltic, commented, "The first well in the current Ain Tsila appraisal campaign has successfully achieved its objective of confirming the presence of a gas column with pressure continuity on the previously undrilled eastern flank of the field. Whilst AT-4 was designed with a primary focus on proving up gas in place rather than productivity, we are optimistic for a positive outcome from testing. The next well in the appraisal drilling programme (AT-5) will test the potential for encountering natural fractures in horizontal wells, in addition to the potential for multiple fracture stimulations to improve productivity and recovery factor for the field".

Tags: Petroceltic International plc