Government gives extension to Cairn India for Rajasthan Block Northern Appraisal Area, Discoveries & Further Drilling Plans

Cairn India Ltd has announced that the Government of India (GoI) has awarded the Company a six month extension to the Exploration Phase of the Northern Appraisal Area (NAA) of the Rajasthan licence RJ-ON-90/1 in North West India from May 2007.

The granting of the extension will allow the Company to carry out an appraisal programme to delineate and explore the full potential of the Northern Appraisal Area (NAA), which covers an area of 879 square kilometres (km2). These discoveries have opened up a new play in the lower Dharvi Dungar sands on the western margin of the Rajasthan basin.

- The Kameshwari West-2 discovery is located 12 km north west of the 2003 Kameshwari discovery and 56 km south of the Mangala field. The well encountered 18.2 metres (m) of net pay in the lower Dharvi Dungar formation from a gross interval of 40 m. From formation pressure data a gas gradient and an oil gradient have been defined in the well. A Gas Oil Contact (GOC) at 1227.5 m MDBRT (1127m TVDSS) and an Oil Water Contact (OWC) at 1247.7 m MDBRT (1147 m TVDSS) have been confirmed.

- Open Hole Drill Stem Testing (OHDST) has been carried out and the well was flowed for approximately 7 hours at an average liquid rate of 450 barrels of liquid per day and 0.06 mmscfd on a 32/64" choke with a water cut of 50%. The oil API is 33 degrees.

- The Kameshwari West-3 discovery is located 10.6 km to the north of Kameshwari West-2 and encountered up to 16 m of gas pay in tight lower Dharvi Dungar reservoir rock in a potential column of over 100 m. The well TD is 1499 m MD. Two DSTs were conducted and test results in the upper interval confirmed the presence of a gas pool which flowed at approximately 75,000 scfd. The deeper test of the potential oil accumulation remains inconclusive due to the tight nature of the reservoir rock.

The area is covered by 350 km2 of 3D seismic data acquired in 2006. Further operations will re-commence in the NAA with exploration well Kameshwari West 'M'.

In June 2005, the Company was granted an 18 month extension (until 14 November 2006) to complete its activities in the northern appraisal area to the north and west of the Development Area. However, the work programme in this area was interrupted by the severe flooding in Rajasthan in 2006. The Company ceased operations in this area and entered discussions with the GoI for a further extension of part of this acreage to complete its planned work programme.

Rahul Dhir Chief Executive Officer of the Company said:
"Cairn India is delighted to have secured this extension in order to further evaluate the potential of this area. The two discoveries confirm our belief that the Rajasthan basin is world class and will continue to add incremental value."

Source : Equity Bulls

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