Petroceltic International has commenced appraisal drilling operations on the Isarene permit in Algeria. Drilling began at the AT-4 well on the Ain Tsila discovery on 16th November 2010.

The overall programme of 4 wells planned for the Isarene permit by Petroceltic (Operator, 75% equity interest) and its co-venturer Sonatrach (25% equity interest), is focused on the large Ain Tsila gas condensate discovery made on the permit in 2009. The wells are being drilled as part of a two-year appraisal extension programme awarded to Petroceltic following the discovery.

The first 3 wells of the programme have already been approved for drilling by the co-venturer and are focused on demonstrating commercial production rates from the reservoir and extending the proven gas area beyond that already discovered in the initial 5-year exploration period. Allowing for rig moves and drilling times, the second well of the programme (AT-5) is expected to begin drilling operations in 8 to 9 weeks time.

AT-4 is a vertical well that is being drilled on the eastern flank of the field where mapping indicates the potential to significantly enhance proven gas volumes. It is planned to take up to 60m of core within the reservoir and then to log and run a completion. The testing programme is designed to facilitate hydraulic fracturing of the reservoir if required. The objective is to define the eastern limits of the field, assess the reservoir quality in this area and gather valuable production test data.

The Company plans to test and where necessary fracture the objective reservoir sections of the wells drilled without using the drilling rig ("rigless testing"). The rigless testing approach has many operational benefits and reduces cost and programme length overall. Petroceltic does not intend to announce the commencement of each well in the campaign. Well testing will be announced on completion, subject to regulatory announcement obligations and the co-venturers agreement to the announcement, in accordance with the public announcement provisions of the Isarene Production Sharing Contract. The first testing results are currently scheduled for announcement in February 2011.

Brian O'Cathain, Chief Executive of Petroceltic commented, "The Ain Tsila field is a world class discovery and we are looking forward to further appraising its considerable potential. The field covers an area of over 1,000 square kilometers with current internal Gas Initially In Place estimates ranging from 6 to up to 14 Trillion Cubic Feet. The two year appraisal extension enables us to properly assess the structure, to establish recoverable gas reserves and to optimize our development programme investment. We expect to follow this delineation programme with submission of a plan of development to the Algerian authorities during 2011."

Tags: Petroceltic International plc