PRD Energy Inc. ("PRD" or the "Company") (TSXV: PRD) has completed drilling and logging operations at the Boerger well in Germany. Highlights of the results to date include:
485 meters of horizontal length drilled in the targeted Jurassic Obermalm 1 zone in which oil and gas shows were seen throughout and assumptions regarding reservoir pressure confirmed;
The well has been cased with sleeves for approximately 200 meters with the remainder of the horizontal section being open hole;
The targeted Obermalm 1 formation is a highly fractured dolomitic sandstone interbedded with shales and anhydrites with a history of offsetproduction; and confirmation of the Company’s view that the Northwest German basin contains attractive geologic and economic opportunities.
The costs for the drilling, completion and construction of surface facilities is estimated to be approximately CAD $9.25 million, of which approximately CAD $6.0 million has been incurred as at September 30, 2013. As at September 30, 2013, the Company had approximately CAD $5.3 million of working capital which will be used to fund the estimated CAD $3.25 million necessary to complete the project. The primary causes of the cost overruns are attributed to performance of the drilling rig, drilling procedures and mechanical difficulties encountered during operations.
In the Northwest German Basin, oil deposits typically reside at depths much shallower than the gas deposits on which the majority of recent industry activity has focused for development. The Boerger well is one of a limited number of horizontal wells which have targeted oil in this basin resulting in a set of operating conditions where limited industry experience was available to the Company and its partner and service providers. The Company’s experiences have highlighted several key areas of focus including; rig performance criteria, mud chemistry and bit selection. As a result, the Company has undertaken a full review of the operations to date and is working with its service providers to achieve better outcomes regarding equipment selection, performance improvements and greater certainty surrounding timing and costs which the Company can apply to future operations in this basin.
The Company is confident that the application of modern conventional technology, combined with operational improvements will unlock the potential of this basin.
