Coastal Energy Company announces the results of an interim third party evaluation of its onshore and offshore reserves in Thailand.
RPS Energy Ltd. (“RPS”) prepared a report dated July 30, 2012, with an effective date of March 31, 2012, in accordance with the guidelines established by the Society of Petroleum Engineers (“SPE”). The RPS report was prepared to incorporate the Company’s drilling results at Bua Ban North & South in 2012 as well as information from core analyses which were completed subsequent to the RPS report published on March 27, 2012, which had an effective date of December 31, 2011. All comparisons made use the reserve numbers from the report effective December 31, 2011 as the base.
Offshore Proved reserves (1P) increased by 30% to 81.0 mmbbl and offshore Proved plus Probable reserves (2P) increased by 60% to 127.7 mmbbl. Total company Proved reserves (1P) increased by 26% to 87.9 mmboe and total company Proved plus Probable reserves (2P) increased by 45% to 149.1 mmboe.
Bua Ban North
1P reserves increased by 29% to 72 mmbbl and 2P reserves increased by 60% to 108.3 mmbbl. The increase in reserves was driven by a substantial increase in the stock tank oil originally in place (STOOIP) figure following analysis of core samples from Bua Ban North. The core analyses indicate that the level of water saturation in the field is approximately 25%; lower than the 40% level which was being used to calculate the original STOOIP volumes. The STOOIP number also increased due to the additional appraisal and development drilling which was performed on the field in the first quarter (Bua Ban North B-12 & B-13).
Bua Ban South
The Company booked 2.6 mmbbl of 1P reserves and 5.3 mmbbl of 2P reserves following the exploration & appraisal program at Bua Ban South. A further 14.7 mmbbl was placed in the Possible reserves category, bringing the 3P reserves to 20.0 mmbbl. The Company expects that it will be able to re-categorize much of the Possible reserves into 1P and 2P once production testing is performed.
Songkhla A & Bua Ban Main
2P reserves at Songkhla A and Bua Ban Main increased by 18% and 20% respectively as reservoir performance in 2012 has been better than modeled.
Following the successful test of the Dong Mun sidetrack well (Coastal 39% working interest) in the first quarter, the Company has recorded 59.7 bcf (10.0 mmboe of high quality contingent resources. This will be reclassified into 1P and 2P reserves once a gas sales agreement is secured. The Company and its partners in the onshore assets are currently working on the development plans for the field as well as securing a sales agreement and evaluating pipeline construction.
Two horizontal development wells and two water injection wells were drilled at Bua Ban North. The two horizontal wells are producing approximately 1,800 bopd each. Current offshore production is 22,500 bopd, with total company production averaging 24,500 boepd.
The lack of aquifer support on the western side of the field had caused the Company to shut in production from three of the existing wells (Bua Ban North A-01, A-03 and A-11). Now that water injection has been established, the Company will begin producing from these three wells again once pressure rebuilds (expected to be in approximately 30 days).
The rig is currently undergoing regulatory inspections and will spud the Songkhla J Buried Hill prospect following completion, which is expected next week.
The Company has purchased the production facilities at Bua Ban North A, which will reduce its lease operating costs going forward as well as provide tax advantages. This brings the number of owned MOPUs to three.
Randy Bartley, President and CEO of Coastal Energy, commented:
“We are extremely pleased with the results of the interim reserves evaluation by RPS. Bua Ban North continues to surprise to the upside. The core analysis gave us a lot of valuable information about the reservoir and helped us to better formulate our field wide development plan. We are looking to contract a second rig so we can execute the Bua Ban North development while continuing our exploration program and expansion into Malaysia.
“Drilling the much needed water injectors will help to bring production from Bua Ban North back up to higher levels. We are already seeing increased rates from the Bua Ban North A-08 well due to the pressure reinjection. We expect to see benefits at the remaining wells on the western flank in the coming month as the water injection brings pressures up throughout the western side of the reservoir and we begin producing from the remaining three producers on that side.
“The Songkhla J exploration prospect is a pre-Tertiary objective approximately 2.5 kilometers north of the discovery well at Songkhla H. The well is expected to spud later this week and will be drilled to a depth of 6,700 feet. We have also commenced the planned 3D seismic acquisition over Block G5/43.”
Press Release, August 2, 2012