RNS Number : 5165X
Solo Oil Plc
16 February 2012
16 February 2012
SOLO OIL PLC
Operational Update, Canada
Solo today announces an update on activities in South Western Ontario, Canada operated by its Joint Venture partner Reef Resources Limited ("Reef").
Reef's announcement, to the Toronto exchange, reads:
February 15, 2012 - Calgary, Alberta - Reef Resources Ltd. ("Reef" or the "Company") reports that substantial further progress has been made on a number of field activities associated with the ongoing development of the Ausable Gas Recycling and Enhanced Oil Recovery (EOR) project.
· The recent cold weather in Ontario has improved conditions for completing the pipeline between the existing South Airport gas well and the Ausable process facility. Once the pipeline welding is completed the required road bores will be conducted.
· The reversal of the Union Gas meter, which will allow the Company to purchase natural gas for re-injection in the Ausable reef, is tentatively scheduled for February 27th. Piping modifications at the facility will commence once the gas flow is reversed. This will allow initiation of the gas re-injection scheme. Additionally, gas and gas liquids from South Airport will also be used for re-injection once the pipeline is completed and commissioned.
· The workover program for installation of a production packer in Ausable #1 well is being initiated to coincide with the planned meter reversal. This will isolate the top set of three perforations and will allow for planned gas reinjection into the uppermost section of the Ausable reef.
· A larger inlet separator has been sourced in Alberta and following minor upgrades will be shipped to Ontario. The larger separator is designed to handle higher oil, water and natural gas volumes associated with the venturi pumping system. Facility upgrades associated with the larger separator will accommodate production from all the Ausable and Airport wells.
· The new high pressure surface venturi pump skid design is completed and the Company is currently sourcing qualified fabricators for skid packaging. The new pump package will accommodate all current and future planned wells.
· After commissioning trials on the Ausable #5 venturi pump, a down-hole valve requires replacement. A service rig is required in order to retrieve and re-run the down-hole assembly and it is hoped this work can be undertaken in the next 10 days. Oil production from Ausable #5 and Ausable #1 is being hampered by the formation of waxes at the pump inlet level approximately 560 metres below surface. This is due to abnormally low reservoir temperatures and further hampered by low ambient temperatures. A gas-fired line heater will be installed to heat high pressure water to service the venturi pumps on all wells. This will increase pump inlet temperatures at the bottom of the well which in turn will mitigate any wax build up at the venturi pump and in the tubulars.
· The North Airport well is proceeding as planned and is currently at 194 metres. Cementing of the surface casing is anticipated within the next 10 days.
Arnie Hansen, Reef President commented: "All the components for initiating the EOR program are coming together and we can now look forward to realizing the production benefits once all the current projects are commissioned and on stream. The Company is hopeful that with the EOR scheme fully implemented it can hit its target of 200 boed by mid-year and exit 2012 with net production of up to 500 boed. "
Neil Ritson, Solo Executive Director, commented;
"Reef has maintained momentum on all fronts despite difficult weather conditions. The need to install heaters on the venturi jet pumps was not originally foreseen and has so far prevented final commissioning of the Ausable #5 pump during the winter. The arrival of injection gas at the plant will significantly increase production potential. Solo shares Reef's confidence that production will reach 500 boed by end of 2012."
Competent Person's Statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for Solo Oil Plc who has 35 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers, an Active Member of the American Association of Petroleum Geologists and is a Fellow of the Geological Society of London.
For further information:
Solo Oil plc
+44 (0) 20 7440 0642
Beaumont Cornish Limited
Nominated Adviser and Joint Broker
+44 (0) 20 7628 3396
Jerry Keen (Corporate Broker)
Pelham Bell Pottinger
+44 (0) 20 7408 4090
+44 (0) 20 7861 3232
boed - barrels of oil equivalent per day
This information is provided by RNS
The company news service from the London Stock Exchange