Range Resources says Shabeel North will go deeper than planned to explore lower levels

Proactive Investors USA & Canada
Monday, July 30, 2012

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Shabeel North well in Puntland, Somalia will be drilled deeper than planned to try to find oil at lower levels.

Operator Horn Petroleum said it wanted to evaluate the potential of the Lower Cretaceous and Jurassic sections after testing of the upper Jesomma sand reservoir confirmed only water and no oil.

The new target depth is approximately 3,400 metres, 1,000 metres deeper than planned, which will take an additional 15 to 20 days to reach.

Horn said that the Jurassic section in the nearby Shabeel well had thin reservoir sands with oil and gas shows, but this section was determined to be not thick enough to warrant testing. These sands are expected to thicken basinward towards Shabeel North.

There was also evidence that there may have been faulting in the Shabeel well which could have cut out a significant portion of the basal reservoir section, which is not expected in Shabeel North, Horn said.

David Grellman, Horn Petroleum’s President and chief executive said the company was still hopeful Shabeel North could prove prospective and that the long term prospects were still encouraging.

“We are still hopeful that the lower zones in the Shabeel North well may have favourable trapping geometries against the deeper thick carbonate and anhydrite sections seen in the original Shabeel well.

"While we are obviously disappointed that the Jesomma sands tested wet, the overall results of the two wells drilled during this campaign are quite encouraging in the long term prospects for oil potential of the basin.

“We have confirmed a working petroleum system, good quality reservoirs and thick impermeable sealing rocks.”

Range Resources holds a 20 per cent working interest in two licences in the Dharoor and Nugaal valleys in Puntland. Horn Petroleum owns 60 per cent and Red Emperor Resources (LON:RMP) 20 per cent.

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