Xcite Energy Limited, a heavy oil company focused on the development of discovered resources in the UK North Sea, provides the results of the 9/3b-5 appraisal well on the "Bentley" field with all principal objectives being met during the well evaluation programme.

The well was drilled to a total depth of 4105ft. and, as anticipated, encountered heavy oil bearing Palaeocene Upper Dornoch Formation sands at 3712ft with 87ft gross (86 ft net) hydrocarbon column. Despite difficult weather conditions and, as a result, a shorter period for the drill stem test than the Company had hoped for, the well test met all of the Company’s principal objectives and is a significant step forward in the understanding of the Bentley field and its commercial value.

These objectives included:

1. Obtaining a crude oil sample to establish the key fluid parameters including API gravity, viscosity, TAN (total acid number) and the metals content of the oil;

2. Flowing crude oil to surface through a drill stem test at rates commensurate with the well conditions, completion approach and pump capacity, and to recover the oil produced;

3. Obtaining a water sample from the aquifer for chemical analysis and for calibration of wireline logs;

4. Confirming the characteristics of the reservoir;

5. And obtaining productivity data on which to model potential production profiles.

The drill stem test was conducted under difficult weather conditions that, in the event, reduced the time available for testing to 20 hours. During this period, the well clean up process was undertaken gradually and was still not fully complete at the time the test was stopped due to severe weather conditions.

The planned low capacity, sand tolerant electrical submersible pump performed as expected, with the slow start and gradual increase in pump speed confirming the suitability of the Company’s testing approach for a reservoir of this nature.

The final few hours of the flow test demonstrated 100% crude oil production (with intermittent pockets of drilling fluids) at a rate equivalent to 150 bbls/d from the planned 50ft section of the oil column that had been successfully perforated. This flow rate was within the expected range for a test of this design and nature, with approximately 75 barrels of crude oil collected.

This drill stem test outcome in such a short timescale is viewed by the Company as a major success and as a seminal step forward in the understanding of the Bentley field and its commercial value.

The initial analysis of the crude oil sample obtained indicates, at reservoir conditions of 40 degrees centigrade, a specific gravity of 0.976, which the Company believes is within the acceptable range for commercial development and is consistent with the Company’s expectation for the Bentley reservoir. The Company is greatly encouraged by this outcome.

The crude oil sample is undergoing a range of further analysis and a water sample, obtained through the wireline formation tester tool, is currently also undergoing analysis.

The characteristics of the reservoir, all of which are consistent with the Company’s expectations, were confirmed as:

• High porosity and permeability unconsolidated sandstone

• Temperature of over 103 degrees Fahrenheit

• Depth to top of reservoir 3712ft

• No gas cap

Based on these well test results, the Company believes that commercially viable production rates are achievable through the application of horizontal well technology coupled with appropriate artificial lift, including submersible pumps. The Company now intends to proceed with planning for the next phase of the development process for the Bentley field, which will utilise EOR techniques consistent with the qualities of the reservoir and characteristics of the crude oil.

Based on the success of the 9/3b-5 appraisal well, the Company now intends to re-process the 3D seismic data over the Block to confirm the results of its recent 3D interpretation, which indicated a material increase in STOIIP compared to the 2D seismic.

In addition, the Company will move forward to plan further and identify the optimum methodology for the future commercial development of the Bentley field. As part of this work programme, the Company intends to update the work performed by RPS Energy Canada Ltd to provide a revised Competent Person’s Report.

The Bentley heavy oil field is located on Block 9/3b (licence P. 1078), in which Xcite Energy holds 100% working interest. Block 9/3b is approximately 160km east of the Shetland Isles with an area in excess of 200 km². Bentley has been drilled by three of the four previous wells on Block 9/3b, being wells 9/3-1 (Amoco, 1977), 9/3-2A (Conoco, 1983) and 9/3-4 (Conoco, 1986). This is the fifth well on the Block.

Richard Smith, Chief Executive Officer of Xcite Energy, commented, "The outstanding success of the 9/3b-5 appraisal well takes us past another of our key milestones for the Xcite Energy business and for the Bentley field, one of the largest undeveloped heavy oil fields in the North Sea. We are grateful to all those who have helped achieve this success and we now turn our attention to the next phase of commercialising the Bentley field within the Company’s expected timescale"

Tags: Xcite Energy