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Petromanas Expands Drilling Program With Spud of Juban-1 Well; Provides Operational Update (cnw)
CALGARY , Dec. 3, 2012 /CNW/ - Petromanas Energy Inc. ("Petromanas" or the "Company") (TSXV: PMI) today announced the Juban-1 well located on Block A onshore Albania has spud, set surface casing and is drilling ahead. The Company intends to drill the 100% well to a target depth of approximately 2,600 metres. Petromanas locally sourced a double land rig with a 1,000 horsepower rating from Simmons Edeco Limited. Drilling is expected to take approximately 30 days at an estimated cost of US$9 million.
"Spudding the Juban-1 well is another important step forward in our 2012 drilling program," said Mr. Glenn McNamara , CEO of Petromanas. "Juban is our shallowest prospect and drilling this prospect will allow us to begin assessing the potential of the carbonates in the northern part of the country, outside the areas of current production."
Drilling of the Shpirag-2 well continues to make progress. The Company previously set casing to a depth of 3,414 metres and the hole is currently in the Flysch shale above the target carbonate reservoir zone. After reaching a depth of 4,465 metres the well experienced some instability resulting in a sidetrack. The well is currently drilling at a depth of approximately 4,230 metres. With recent tectonic activity in the area impacting the stability of the Flysch shale, the Company is evaluating drilling options including, among other things, the optimal depth to set casing to put the unstable zone behind pipe. Estimated well costs are currently US$39 million gross, US$7 million net to Petromanas. The top of the target carbonate is expected to be encountered at approximately 5,000 metres. The Company plans to penetrate approximately 1,100 metres of carbonate to reach a target depth of approximately 6,100 metres, which is anticipated to be reached in late 2012 or early 2013. Testing will follow reaching total depth.
The Company has also initiated its 2012 2D seismic test program over Blocks 2-3 using Geotec Spa of Italy. Petromanas is now shooting a test seismic line that will help determine the final shot parameters for the balance of the 400-500 kilometre program, expected to be completed in 2013. The current activity is evaluating alternative shot hole depths and charge sizes to optimize data quality and cost. The test program results have the potential to reduce future seimic costs in the area. Under the terms of the Company's Farm-Out Agreement with Royal Dutch Shell plc, Shell will carry the first $20 million dollars of this seismic program with any excess amount shared equally by both parties.
Following ongoing discussions with the Albanian Government, Petromanas has requested and is awaiting approval of a one-year extension to complete its commitments for Period 2 under the Production Sharing Contract ("PSC") for Blocks D-E. The Company previously provided the Albanian Government with a standby letter of credit for $6.3 million in support of its Period 2 performance guarantee, which remains in force. If the extension is granted, Petromanas would have until December 25, 2013 to complete its obligations on Blocks D-E under the PSC. The Company intends to use the information gathered from its drilling programs at both Shpirag and Juban to determine how best to meet its commitments for Period 2. The Company considers Blocks D-E to be of higher risk than Blocks 2-3 and relatively costly to explore based on the lower prospective resource volumes allocated to the Papri prospect.