Offshore staff

ADELAIDE, Australia -- The NS377-5 oil development well in the Gulf of Suez North Shadwan lease offshore Egypt has reached TD of 2,909 m (9,544 ft), after intersecting a gross oil column of 107 m (351 ft) in Miocene-age sandstone in the Kareem formation.

According to partner Beach Energy, NS377-5 was drilled as an extended reach deviated well from an onshore location to allow for rapid completion and connection of the well to onshore production facilities.

Beach adds that the BP-operated development program for the near shore fields is proceeding as planned. Drilling activity, although technically challenging, is on budget, likely confirming the economic benefit of undertaking the project from onshore rather than offshore.

NS377-5 was drilled 465 m (1,525 ft) northwest of the NS377-3 development well, drilled in the closing stages of 2009, which encountered a 144-m (472-ft) oil column. Although the gross oil column is smaller than in the earlier well, the reservoir quality appears to be higher. Beach expects initial production from NS377-5 of around 1,500-2,000 b/d, similar to NS377-3.

The oil will be exported about 7 km (4.3 mi) to the northwest via a new pipeline to Petrobel's Ras Ghara processing facility on the east coast of the Gulf. Full production from the field should start this summer, initially at a rate of over 3,000 b/d.

Later this year the partners plan to drill the NS385 oil field development, again offshore and 4 km (2.5 mi) southeast of the NS377 field. Here, too, they expect to use extended reach technology from onshore, with production tied into the same export route as NS377.

Beach estimates combined recoverable reserves from the two fields at around 11 MMbbl.

02/15/2010