Production Resumes at The Viura Gas Field with Revenue Expected in November
Drilling of Viura-1B Well Exceeds Expectations with
Encouraging Gas Shows and Several Potential Reservoir Formations Found
Prospex Energy plc (AIM: PXEN) announced that the Viura-1B development well, drilled by HEYCO Energy Iberia S.L. (“HEI”), has successfully reached its revised Total Depth (“TD”).
The well reached a TD of 4,500 meters, approximately 4,100 meters True Vertical Depth (“TVD”), on 21 October 2024, in the 6-inch section at the bottom 450 meters of the well. Drilling deeper into the Utrillas-B formation has proven to be a highly successful commercial decision, with promising gas shows and multiple potential reservoir formations identified in this previously unexplored section, along with valuable new data.
The Viura gas field has resumed production, with gas now flowing from the existing Viura-1 ST3 well. Revenue from the Viura-1B well is expected to begin in November 2024.
Prospex holds a 7.2365% interest in the Viura field through its 7.5% ownership in HEI. The company will receive 14.473% of the production income from the Viura gas field until it recovers its initial capital investment from the August 2024 acquisition.
Overview
· Drilling of the Viura-1B well commenced on 22 June 2024. The revised TD was successfully reached on 21 October 2024 after the decision to deepen the well.
· The well encountered the main Utrillas-A reservoir unit 50 metres high to prognosis and encountered the top reservoir with good quality reservoir rock with significant gas shows throughout the drilling of the main reservoir target and with gas-bearing formations extending some 30 metres deeper than nearby wells in the formation.
· Deepening the well to appraise the Utrillas-B formation has resulted in the discovery of a new gas-bearing section beneath the proven and producing Utrillas-A formation in the Viura gas field.
· Logging, flow testing and further detailed analysis of the large amount of data acquired from the well will be required before there can be a revision to the gas in place and recoverable reserves in Viura, although a material upgrade is anticipated.
· The Viura-1B well will be connected to the existing gas processing facilities on site during the planned flow testing programme, thus immediately generating revenues, with production income expected in November 2024.
· The Viura field recommenced production on 15 October 2024 from the existing well Viura‑1 ST3 to test the facilities following recent maintenance and upgrades ahead of the planned testing programme. It has been flow tested at rates up to 17 MMcfd (0.48 MMscm/d).
With Total Depth (TD) reached, the operator has deployed wireline logging tools to assess the Utrillas-B formation before completing this interval with a 4½-inch liner. A multistage completion will follow, enabling an extensive flow testing program to determine flow rates from various sections of the Utrillas-A formation before placing the well into long-term production. The flow testing for the Utrillas-B section is scheduled for later in 2025.
The well has already surpassed pre-drill expectations for the primary reservoir target, the Utrillas-A, with preliminary analysis indicating the discovery of a new gas-bearing reservoir interval in the previously unexplored Utrillas-B formation.
As previously announced on 2 October 2024, the well encountered the main Utrillas-A reservoir unit 50 meters higher than anticipated, with significant gas shows throughout the drilling and coring process. Gas-bearing intervals were also identified approximately 30 meters deeper (TVD) than the lowest known gas-bearing sections in nearby wells. The extension of drilling to evaluate the Utrillas-B formation proved successful, revealing gas-bearing reservoirs. Analysis of the wireline log data from this newly drilled section will be conducted to assess the volume of gas in place. Crucially, flow testing will be carried out to determine reservoir deliverability before the well is brought into production. The Viura gas plant, which connects to the Spanish national grid, will process the gas produced during the testing phase for immediate export and sale.
The additional cost of deepening the well to evaluate the Utrillas-B section is within budget, with a total gross expense of €2.5 million. Prospex has already covered its 15% share of the cost (€375,000) for the deepening and completion.
Mark Routh, the CEO of Prospex, commented:
“I am extremely pleased to announce further successful results from the Viura-1B development well. Although there is a great deal of analysis to be carried out to fully assess the implications of the well results to the recoverable reserves from the Viura field, this has transpired to be a highly successful project in which to be involved.
“Deepening the well to evaluate the previously undrilled formations below the proven, developed and producing Viura gas field has turned out to be an inspirational decision. There are positive signs that a new gas bearing interval has been encountered with further analysis and importantly flow tests required to quantify the impact on recoverable reserves.
“It is also good news that the existing well on the Viura field successfully recommenced production last week with the produced gas being sold into the grid.
“I look forward to updating shareholders with results from the flow testing and further analysis as soon we have firm data to share.”
