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Rally Energy Corp. Reports Third Quarter Profit and Significant Production Gains in Egypt

Source: www.oilegypt.com 11/30/2004, Location: Africa

Rally Energy’s financial results for the third quarter of 2004 reflect continued success in increasing oil production in Egypt.
Issaran Oilfield, Egypt
During the third quarter of 2004, six new wells were drilled in the Issaran field. In the Northern Area of the field four new oil wells were drilled, three targeting the Nukhul Formation one targeting substantial thicknesses of heavily fractured Dolomite Formations. In the Southern Area, two new wells were drilled to function as injectors/producers for the Upper Dolomite Steam Pilot Project.

Northern Area
In the heavily fractured section of the Northern Area of the Issaran field, production to date is extracted primarily from the Lower Dolomite Formation. Well #25 continues to produce in excess of 800 bbls/d of oil and well #42, despite only penetrating the upper portion of the Lower Dolomite Formation, is producing in excess of 300 bbls/d of oil.

One Upper Dolomite well, well #49, was drilled in the third quarter. Based on data from logs and drilling, the Corporation has previously expressed optimism that the Upper Dolomite Formation, like the Lower Dolomite Formation, was also fractured and contained significant reserves. This was confirmed in the third quarter with the drilling of well #49. This significant well, recently completed in the Upper Dolomite Formation, has been put on production with initial oil production rates currently varying up to 600 bbls/d.

This well is of considerable importance to the Corporation in that wells in the identified fractured portions of the Northern Area can now be twinned targeting both Upper and Lower Dolomite fractured reservoir production.

Three Nukhul oil wells were drilled in the Northern Area during the third quarter. One was a successful infill development well, currently producing approximately 100 bbls/d, and two were drilled on a geophysically defined separate fault block. The first of the wells drilled in the separate fault area has been completed and is currently producing over 150 bbls/d of oil and the second well is currently being completed and production tested. The results of these Nukhul wells confirm that several additional follow-up drilling locations exist on this separate fault block.

Southern Area
As mentioned in previous reports, Rally Energy is committed to testing the production enhancement potential of Thermal Recovery in the Issaran field Upper Dolomites. During the third quarter, the Corporation drilled two Upper Dolomite cyclic steam injection/production wells with a view to commencing Upper Dolomite steaming operations prior to year-end. These two steam injectors/producers, along with the previously drilled observation well, will form the nucleus of the initial pilot program utilizing our steam injection facilities. Steaming in the Upper Dolomite Formation is expected to commence in December.

Currently mapped Issaran Upper Dolomite Formations contain in excess of 300 million barrels of original oil-in-place. Our reservoir modeling study indicates that cyclic steam stimulation, followed by steam drive in the Upper Dolomites, could result in the recovery of 24 percent or more of original oil-in-place. A successful steam pilot test can reasonably be expected to have significant positive implications in connection with Issaran oil production and will result in the expenditure of significant capital to establish full-scale commercial operations.


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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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