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Yemen Project (Block 9) Development

To date, five independent oil discoveries have been made on Block 9, at Hiswah, Auqban, Al Roidhat, Qarn Qaymah and Ras Noor. A sixth possible discovery at Al Hedba require additional appraisal drilling for confirmation. On the strength of these discoveries, Calvalley declared commerciality, on behalf of the Block 9 Joint Venture, and initiated early production and addresses ‘full field development’.

The satellite image below (Figure 1) shows the main development area in Block 9 and the location of the Central Processing Facility (CPF) at the Hiswah Field.

Figure 1

Figure 1

Hiswah:

Calvalley initiated early oil production from the Hiswah field in Block 9, in late December 2005. The Hiswah Field contains high-gravity crude in the Saar-Naifa Formation. The reservoir at Hiswah lies 1,100 metres below ground level and is characterized as a porous and fractured limestone. Average reservoir porosity is 16% and often exceeds 20%. Horizontal drilling technology has been employed at Hiswah in order to most efficiently maximize productivity of the field.

The core photograph and thin section photomicrograph below (Figures 2 & 3) are examples from the reservoir at Hiswah, in this case a core cut from Hiswah-3. The reservoir rock here is described as a bioclastic lime grainstone with 20% porosity and 41 miliDarcies permeability.

Figure 2

Figure 2–Core from the Saar-Naifa reservoir in Hiswah-3. The bioclastic constituents are clearly visible in this sample

Figure 3

Figure 3–In this photomicrograph, the blue areas are porosity, which in this sample is 20%.

In order to achieve early production from Block 9, a temporary processing facility was constructed while the design for the Central Processing Facility (‘CPF’) was being carried out. The temporary processing facility is located near the Hiswah-3 and Hiswah-6 wellheads while the permanent pad for the CPF is located near Hiswah-2. The temporary facility has a manifold, separator, oil storage vessels and truck-loading facility. This facility has allowed the Block 9 Joint Venture to achieve early cashflow as well as to obtain early reservoir information to assist in the design of the CPF.

Figure 4

Figure 4–Hiswah-3 wellhead

Figure 5

Figure 5–Hiswah-6 wellhead

Five horizontal wells are currently producing and are tied-in to the temporary production facility via three inch field gathering pipelines. The temporary facility is currently operating at maximum capacity and the total production rate is limited to 10,000 bopd.

The facilities shown below (Figures 6, 7, 8 & 9) are currently handling the early production at the temporary facility.

Figure 6

Figure 6–Test Separator

Figure 7

Figure 7–Truck-Loading Facility

Figure 8

Figure 8–Pipeline to Oil Storage Tanks

Figure 9

Figure 9–Oil Tankers

The Hiswah Oil Field has two structural highs separated by a saddle or low area, as shown on the generalized map below (Figure 10). This structural saddle effectively isolates the gas cap that occupies the south-eastern high. It is believed that future oil production will benefit from gas-cap expansion and, in support of this, a wellbore is being planned for the crest of the northwest lobe, in order to inject gas for pressure maintenance.

Figure 10

Figure 10

The structural mapping has been facilitated by data from six vertical wellbores in addition to eighteen horizontal wells. The Hiswah structure is a northwest-southeast trending anticline having three-way dip closure and is sealed on the southern side by the Hiswah Fault. The oil column has an aerial extent of approximately 6.5 km, based on the 3D seismic interpretation. To date, the preliminary development plan for Hiswah has identified a total of 32 horizontal well locations.

Figure 11

Figure 11–Satellite image of Yemen Block 9 and the existing export pipeline.

The final transmission pipeline design and tender negotiations are in progress. The CPF at Hiswah is being equipped with the required facilities for full field development and the installation of the transmission pipeline. Currently, the Block 9 Joint Venture believes that an initial export volume of approximately 30,000 bopd will be achieved once the transmission pipeline is in operation.

Auqban:

In order to provide incremental production capability, the Auqban-1 oil well will be tied into the CPF. Auqban-1 discovered oil in the Shuqra Formation, at a depth of 1,650 metres, produced at a test rate of approximately 268 bopd. The 40° API gravity crude at Auqban will be blended with the 35° API gravity crude from Hiswah. The map below (Figure 12) shows the presently mapped closure that has been interpreted from the existing seismic database.

Figure 12

Figure 12–The oil in the deeper Shuqra Formation is difficult to image on seismic, however, seismic events evident near the pay interval assist in mapping the structural closure.

The Shuqra reservoir at Auqban is characterized as a limestone that could be reefal in part. The average porosity in the Shuqra pay zones is 9% and no bottom water was intersected. There is a possibility that the Shuqra oil column is in communication with the underlying Kohlan sandstones which may also provide oil pay in Auqban-1. The deepest known oil in Auqban-1 is at the base of the net pay interval in the Kohlan sandstone, at a depth of 1,720m.

Early production history from Auqban-1 will assist in defining the potential upside in reservoir volume and could lead to additional appraisal well drilling. Auqban is located only 12 km from the Hiswah CPF.

Al Roidhat:

The Al Roidhat Oil Field currently represents the only Qishn Clastics oil discovery in Block 9. However, a well that was drilled to evaluate a potential oil column in the Qishn Clastics, at the Hiswah structure, requires additional testing in order to fully evaluate the significance of that discovery. Four wells have been drilled into the Qishn Clastics oil accumulation at Al Roidhat and the Al Roidhat-1 well was production tested in 2004. The photograph below (Figure 13) shows the Al Roidhat field located in Wadi Amd.

Figure 13

Figure 13–Al Roidhat Oil Field, Wadi Amd.

The analysis of the production test at Al Roidhat-1 suggests that the well is capable of 750-1,000 bopd. The oil at Al Roidhat is a heavy, 15° API gravity crude and would require blending with lighter crude in order to generate the full value of this resource.

Additional drilling is planned for the Qishn Clastics oil accumulation in Al Roidhat, with 3 additional development wells planned for 2006. Production from the Qishn Clastics is enhanced by the high porosity and high permeability characteristics of the reservoir sands. At the present time there are nine development locations at Al Roidhat. The map below (Figure 14) represents the top of the Qishn Clastics structure, showing the four existing wells plus potential development locations.

Figure 14

Figure 14

The preliminary development plan will provide for early oil production from Al Roidhat. Initially the oil will be trucked up Wadi Amd to Wadi Hadramut and then westward to the CPF at Hiswah, for blending with other Block 9 crude.

Qarn Qaymah:

Calvalley plans to appraise the gas-condensate discovery at Qarn Qaymah-1 by drilling a well into the hydrocarbon-bearing Kohlan sandstone in a down-dip location. This proposed well will not only increase the areal extent of the pool, but also the potential of a fractured basement contribution to the hydrocarbon column. The seismic section below (Figure 15) shows the imaging of the important near-basement reflectors in the Qarn Qaymah-1 discovery well.

Figure 15

Figure 15–Seismic dip line across the Qarn Qaymah structure and the QQ-1 discovery well.

Qarn Qaymah-1 tested natural gas at rates of up to 9.6 mmcfd with 94.5 bbls of condensate per mmscf of gas from the Kohlan Formation, at a depth of 3,400 metres. The sandstones are calculated to have 13% average porosity over 8.1m of net pay. A compositional gradient model suggests that an oil leg could be present at depth. The proposed appraisal well for this discovery will investigate this potential. The 50° – 52° API gravity condensate will be blended with the other Block 9 production at the CPF.

The Kohlan Formation lies on the Paleozoic Unconformity, directly on basement. The structure map of the near-basement reflector is shown below (Figure 16), with the proposed Qarn Qaymah-2 location also plotted.

Figure 16

Figure 16

From the structure map, it appears that compartmentalization could be an issue, however, if the igneous basement at Qarn Qaymah is fractured and forms part of the hydrocarbon column, then there may be hydraulic continuity across the different fault blocks.

Based on the analysis of gas-condensate composition, there is a possibility that an oil column exists below the gas. Qarn Qaymah-1 did not intersect any fluid contacts and the proposed appraisal well at Qarn Qaymah-2, shown on the map above, will be very important to helping define the hydrocarbon distribution both laterally and vertically.

Operationally, the Qarn Qaymah area is relatively remote and unpopulated. A typical strategy for developing the condensate reserves at Qarn Qaymah may be to have a stripping operation at surface together with compression-reinjection of lean gas.

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