Regal has entered into a contract with Saipem S.p.A, for the provision of 2 new LEWCO 2000 HP drilling rigs for use at Regal’s gas and condensate fields, Mekhediviska-Golotvschinska and Svyrydivske (“MEX-GOL” and “SV”) (working interest 100%), in Ukraine.
The contract provides for the long term provision of these rigs to support the Company’s field development plans in Ukraine, which are anticipated to involve the drilling of more than 60 new wells over the next 7-8 years. The initial duration of the contract is for 5 years with an option for a further 2 years and the rigs are anticipated to be available in Ukraine in Q4 2008.
Regal has entered into a contract with Region Ltd, a Ukrainian based drilling contractor, for the provision of a workover rig for use at Regal’s MEX-GOL and SV fields. This rig is to be used to undertake a planned workover programme of at least 3 wells. GOL-1, GOL-2 and MEX-102, commencing in July 2008, with such workovers expected to take 1-2 months each.
3D seismic acquisition over the SV field, which has been underway since early January 2008, has recently been completed and the data will now be processed, with such processing expected to take approximately 5 months to complete.
Work is underway on the construction of a new reservoir model for the MEX-GOL-SV field area, based on the 3D seismic data acquired over the MEX-GOL field last year and, when available, the recently acquired 3D seismic over the SV field, and a comprehensive reassessment of the petrophysics, petroleum geology and production history of the existing well penetrations in and around the concession. This work is designed to improve the definition of the reservoir character and behaviour to enable optimal targeting of new wells.
Drilling of the MEX-103 well, which is the first new well on the MEX-GOL field since 2004, is continuing and has reached a depth of approximately 4830 metres. The drilling is being conducted by Chernihivnaftagasgeologia (“CNGG”) under a contract signed in July 2007 and the well, which has a total targeted depth of 5,200 metres, is anticipated to be completed in August 2008.
This well is part of the first stage in the full-field development programme for the MEX-GOL and SV fields which contain audited proven and probable reserves estimated, as at 31 December 2006, at 169 million barrels of oil equivalent, based on a reserves audit conducted by Ryder Scott in 2005.
