Kuwait Energy reports first quarter 2011 activities

Kuwait Energy Company, one of the fastest growing independent oil and gas exploration and production companies in the Middle East, today issued its 2011 first quarter activities report announcing unaudited operating cash flow of USD22.2 million. 

Kuwait Energy produced a daily average working interest production of 12,985 barrels of oil equivalent for Q1 2011, a 2.9% decrease from the previous quarter primarily due to wells shut-in for workover maintenance in East Ras Qattara (ERQ) in Egypt.

2010 Reserves Auditing

Kuwait Energy’s year end 2010 reserves were audited by Gaffney, Cline and Associates and recorded proven and probable working interest reserves of 48.8 million barrels of oil equivalent (mmboe). The reserves exclude Karim Small fields (Oman) which is covered by a Service Agreement.

Update on operation amidst regional unrest

In Egypt, the unrest during Q1 2011 led to a brief, precautionary pause that lasted ten days in exploration activities in the Abu Sennan Concession in the Western Desert to allow employees to return home safely to their families. Abu Sennan is a non-producing field and there was no disruption to production or other operations in Kuwait Energy’s three producing fields in Egypt namely Area A, Burg El Arab and ERQ.

In Yemen, the assessment of Yemen’s gas resources and feasibility study were completed as per the Memorandum of Understanding (MoU) signed between Kuwait Energy and the Yemen Ministry of Oil and Minerals in October 2010. A date is yet to be set to present the study to the Petroleum Exploration and Production Authority of Yemen.

Iraq

Kuwait Energy, as the operator of the Siba gas field, has finalized the 2011 work program and budget for the submission and approval of the Iraqi Government once the contracts are signed. Kuwait Energy was awarded 20-year term gas development contracts for the Siba and Mansuriya gas fields. Contracts were initialled on 14 November 2010.

Exploration activities

Four exploration wells were carried over from 2010 and three wells spud during Q1 2011. From these seven wells, two were discoveries, oil in ERQ, Egypt and gas in Jherruck, Pakistan, and commerciality is being investigated. Three wells were dry holes and two wells (ZZ-4 in Abu Sennan and Shebyl East -1 in ERQ) were drilling at the end of the first quarter.

Development activities

Eight development wells were drilled during the quarter in the Karim Small Fields (KSF), Oman. Four wells are producers, three are under completion and one is still drilling at the end of the quarter.

Portfolio management

In April 2011, Kuwait Energy completed the partial divestment of 22% working interest in Abu Sennan concession in Egypt to Beach Energy. The partial divestment of a 15% working interest in the Mesaha concession in Egypt to Beach Energy and the partial divestment of a 20% working interest in Burg El Arab, Egypt to East West Petroleum are still awaiting final regulatory and governmental approvals.