Canada’s Centurion Energy International Inc. announced its financial results for the three months ending March 31, 2001. The first quarter was highlighted by commencement of gas production from the El Wastani field in Egypt and resumption of oil production from the Al-Manzah field in Tunisia. With production from these two fields, Centurion exited Q1 with daily production at 5,039 barrels of oil equivalent.
Earnings for Q1/02 were $500,000 ($0.01 per share basic and diluted) compared to $1,033,000 ($0.02 per share, basic and diluted) for Q1/01. Cash flow from operations for Q1/02 was $2,542,000 ($0.04 per share, basic and diluted) compared to $2,443,000 ($0.04 per share, basic and diluted) for Q1/01.
The principal reasons for decreased earnings for the quarter are the impact of the royalty paid on Al-Manzah production pursuant to the royalty financing arrangement for field development and a hedging loss pursuant to terms of the bank financing closed in late 2001, according to a company press release.
The transactions reduced earnings and cash flow by $935,000. Although the short-term effect of the two arrangements was negative, the royalty financing minimized dilution and mitigated the risk of Al-Manzah field development. The hedging arrangement was part of the security package that enabled the company to arrange a $30 million line of credit.
The construction of the El Wastani gas and condensate pipeline and field facility was completed during December 2001. The facility ties in the El Wastani-1 and 2 wells, which together, are producing at a daily rate of 12 million cubic feet of natural gas and 400 barrels of condensate. Production from the field commenced on March 31, 2002.
Three discoveries in the southern area of the El Manzala Concession established the necessary reserve base for submission of a plan of development to Egyptian regulators for bringing the gas to market. The Gelgel discovery drilled in 2001 added reserves of 85 bcf, the Sherbean discovery also drilled in 2001 added reserves of 10 bcf.
These two new discoveries, when added to the original 1998 southern area discovery Abu Monkar, bring proved plus probable reserves to 115 bcf. A plan of development has been approved that will bring an additional 35 million cubic feet per day to market by mid 2003. A gas contract for this is presently being negotiated.
The Hana South well which initially tested at 1,800 bopd has been suspended awaiting pumping equipment as a recent production test recovered heavier oil than anticipated (13.5 Gravity API) with 90 percent water cut. The ultimate commerciality of this well is yet to be determined.
The Farag-1 well is currently drilling at approximately 9,600 feet. The well is targeting the deep Nubia formation along with the shallower Miocene Rudeis formation, which tested oil in the Hana-8 well. Expected total depth is 10,500 feet. The Nubia and the Upper Rudeis are two of the most prolific reservoirs producing in the Red Sea area of Egypt.
In the fourth quarter 2001, a dump flood program was initiated in the Al-Manzah field. An easily accessible source of water was used to dump flood into the Al-Manzah-3 well. A quick pressure response was noted and after dumping 150,000 barrels of water into AMZ 3, production from the Al-Manzah-2 well resumed late in December 2001.
The well is currently producing 1,200 bopd with no water. Production under the pressure maintenance scheme has reached 170,000 barrels bringing total recovery from the Al-Manzah field to 870,000 barrels. This simple approach is providing a practical solution to recovering Al-Manzah reserves and could result in an additional recovery of up to 1 million barrels. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
