Victoria Oil and Gas, West Medvezhye Project, Russia
VOG’s wholly owned subsidiary, ZAO Sever Gas-Invest (SGI), holds a 20-year Exploitation Licence for West Medvezhye (‘West Med’) covering 1,224 km2. The block is located in the Yamal Peninsula in the Nenets region of Siberia with independently assessed total prospective resources of approximately 1.1 billion barrels of oil equivalent (boe) assessed by DeGolyer and MacNaughton (‘D&M’).
In our last update to the market on West Med in July 2011, we informed you that the Company had commissioned a seismic reprocessing and geological modelling study to be carried out on West Med by an independent Russian geoscience consulting institute, Mineral LLC (‘Mineral’), incorporating the passive seismic survey results, gas tomography and conventional 2D seismic. This work is now complete and a technical workshop was held in Tyumen, Russia in August to review the work and its conclusions.
Mineral has prepared structure maps and seismic attributes anomaly maps for all the prospective formations in the West Med block. These were integrated with the Company’s passive seismic, gas tomography and geochemical studies to define/rank leads and prospects and to further assess the 103 discovery. The relevant technical details are currently under review by the technical team at SGI/VOG/Blackwatch Petroleum Services Limited (‘Blackwatch’) and Mineral is compiling a detailed report of their findings.
I am very pleased to announce that, on the basis of their independent assessment received at the end of August, Mineral has concluded West Med prospective resources are now in excess of 1.4 billion boe including increased oil prospectivity of approximately 670 million barrels of oil in the Lower Cretaceous Neocomian-Achimov and Jurassic formations. These results exceed the previous estimate by D&M by more than 300 million boe and our team continue their assessment and will submit an application later this month to the Russian authorities requesting approval of our proposed drilling location.
West Med Current Reserves & Resources Estimates
Category MMboe(1) Remarks
C1 + C2 Reserves 14.4 Russian Classification
C3 Resources 170 Russian Classification
Prospective Resources 1100 Independently Assessed by D&M
Updated Prospective 1400 Independently Assessed by Mineral Resources
(1) Million barrels of oil equivalent
Mineral are the leading consultants in Russia for this specialised geological work and have an excellent proven track record in Siberia where our West Med block is located. We believe that their updated assessment of over 1.4 billion boe is of major significance and demonstrates the very real potential of our West Med block.
In the meantime, our technical consultant, Blackwatch, has been carrying out integrated appraisal and development studies. The principal objective of the 2011 work program has been to assess and plan for the commercialisation of the large prospective resources and to explore ways to exploit Well 103 with an early production scheme to generate early cashflows. Specific appraisal and development work carried out on the Well 103 area and the prospective resources has included:
• drilling and well engineering design, costing & scheduling;
• surface facilities and infrastructure conceptual design, operational strategy and HSE considerations;
• downstream options;
• economic modelling and valuation parameters; and
• option screening.
Preliminary development assessment work on the Well 103 discovery indicates that we will plan for first oil sales in 2015 subject to further refinement and screening. We shall update you on our West Med programme as the results of our feasibility studies emerge. Valuation parameters under various conceptual development schemes for Well 103 and the prospective resources will also be highlighted once feasibility studies have been completed.
Source www.victoriaoilandgas.com
