Tambak-2 Operational Update

RNS Number : 1393R

Coro Energy PLC

25 October 2019

 

25 October 2019

Coro Energy plc

("Coro" or the "Company")

Tambak-2 Operational Update

Coro Energy plc, the Southeast Asian focused upstream oil and gas company, is pleased to provide an operational update in relation to the drilling campaign in the Duyung Production Sharing Contract in the West Natuna basin, offshore Indonesia, in which Coro holds a 15% interest.

Following the drilling of the Tambak-2 well as announced on 15 October 2019, operations have been focussed on conducting a Drill Stem Test ("DST") across the intra-Muda reservoir. The operator has reported that these DST efforts have not been successful, due to formation damage in this highly permeable and porous reservoir.

·      Two separate DST attempts have been conducted across the intra-Muda reservoir without success due to extreme formation damage.

·      Operational issues encountered while setting the bridge plug (needed to isolate the gas-bearing reservoir) resulted in a 'swabbing' of the well which led to a substantial gas kick, with gas flowing to surface.

·      Heavy mud was used to control the well, resulting in large volumes of barite mud being lost to the permeable reservoir.

·      Reservoir formation became plugged and damaged by the barite mud.

Prior to the DST attempts, a full logging suite was acquired, including formation pressure measurements, in the Tambak-2 well. This confirms a 10 metre (33 ft) gross gas zone with formation permeabilities calculated to be in the 200 millidarcy to 3 darcy range across the best quality zone, a highly permeable reservoir as predicted. The pressures indicate the well encountered the same gas accumulation as at Mako South-1, over 13 km away, with mud gas readings indicating a dry methane gas almost wholly C1 with minor C2, again consistent with Mako South-1. Petrophysical analysis of the log data suggests any DST testing would have yielded similar high flow rates to the discovery well.

The next step in the drilling campaign will be to mobilise the rig to the Tambak-1 location where the well spud is anticipated in the coming days.

James Menzies, Coro Energy CEO commented:

"While the lack of a successful DST at Tambak-2 is disappointing, the main objectives of the well have been met, namely demonstrating a continuous gas-bearing reservoir over a large distance; confirming the same pressure system and gas-water contact as seen at Mako South-1 and in addition, the same quality of reservoir but with better sand development than expected. In light of these results, we remain confident of a material uplift in contingent resources and asset value.

The Asian Endeavour 1 rig is now being prepared to mobilise to the Tambak-1 location where we will further appraise the Mako field and also test the underlying Tambak structure, an exciting amplitude supported prospect with mid-case prospective resource potential of 250 Bcf."

Further announcements will be made as appropriate. Coro remains fully funded for its share of costs associated with the drilling campaign.

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information please contact:

Coro Energy plc James Menzies, Chief Executive Officer Andrew Dennan, Chief Financial Officer	Tel: [phone]
Cenkos Securities plc (Nominated Adviser) Ben Jeynes Katy Birkin	Tel: [phone]
Vigo Communications Ltd (IR/PR Advisor) Patrick d'Ancona Chris McMahon	Tel: [phone]
Mirabaud Securities Ltd (Joint Broker) Peter Krens Ed Haig-Thomas	Tel: [phone]
Turner Pope Investments (TPI) Ltd (Joint Broker) Zoe Alexander Andy Thacker	Tel: [phone]

The information contained in this announcement has been reviewed by Coro Energy's South East Asian Business Manager and Geologist Pierre Eliet, a Fellow of the Geological Society and a Member of the Petroleum Exploration Society of Great Britain.

A darcy and a millidarcy are the standard units of measurement of permeability, being the capacity of a rock layer to transmit fluids.  The volumes included in this announcement are in accordance with SPE standards.

 

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