Paris Valley Project Update
Neon Energy has successfully completed operations on its 100% owned NPV-1 well test after producing oil from two different reservoir zones. The NPV-1 well was drilled into North Paris Valley (“NPV”), a previously untested compartment of the Paris Valley Field which produced oil in the 1970’s. While successful in recovering oil, the rate was not sufficient to justify commercial production due to the viscous nature of the oil and, as anticipated, due to difficulties associated with injecting steam into the reservoir via a vertical well bore.
Analysis of rock and fluid samples recovered from the NPV-1 suggests that a horizontal well bore will be required to sustain commercial production, however the use of the existing vertical well to commission the newly acquired steam generator provided considerable cost advantages.
The Company will now shift its focus to horizontal appraisal drilling at Central Paris Valley (“CPV”) where proved plus probable (2P) resources defined by more than 30 existing vertical wells are estimated at 9.1 million barrels recoverable. Neon anticipates that a combination of horizontal drilling and steam injection will be the key to unlocking the full commercial potential of the Paris Valley field.
Up to three horizontal wells are planned for CPV with each having the potential to be developed via an extended production test, with the produced oil being used to recover drilling costs. The first well is expected to commence drilling during H1 2011 with results of the first production test available shortly thereafter. Successful results from the horizontal appraisal drilling will provide the basis of an independent reserves report and a full field development plan.
If the results are encouraging a horizontal well may then be planned for NPV where Neon estimates there could be up to 100 million barrels of oil in place. Based on the results from the NPV-1 vertical well, estimating recovery efficiency at this stage would be both speculative and premature.
Neon’s Managing Director Ken Charsinsky commented “The NPV-1 test result confirms our expectation that horizontal drilling will be required to fully develop the Paris Valley Field. We shall now focus on developing the Central Paris Valley compartment where there is a history of oil production using steam injection. Once we have learned more about how the main field performs we shall return to North Paris Valley to reassess its potential.”
Download this document
