Caspian Sunrise BNG production falls as it continues busy work programme

Caspian Sunrise updated the market on progress across the structures it had already identified at the BNG Contract Area on Friday, reporting success in milling away the 2.6-metre metallic obstruction in Well A5 at a depth of 3,887 metres, following which an 85-metre section of lining had been removed from the well much sooner than it expected.

The AIM-traded firm said that, while it believed that already provided sufficient room to start the planned 500-metre side-track below the salt layer, for operational ease it had decided to continue to seek to remove approximately a further 30 metres of the lining.

If successful, the company said the side-track would start at a depth of 4,006 metres, but it was not possible to remove those additional 30 metres of liner, the side track would start at a depth of 3,976 metres.

Once started, the side-track was expected to take up to two months to complete.

At Deep Well A8 - the third deep well drilled on the Airshagyl structure - the firm had previously referred to the existence from a depth of 4,342 metres of a 159-metre carbonate interval, of which 52.5 metres is of porous oil-bearing rock.

Since the firm’s last announcement, casing had now been set to a depth of 4,520 metres, and the associated cementing had been completed.

“We are waiting on an independent assessment of the quality of the cementing before deciding how to proceed,” the board said in its statement.

At its other deep wells, Caspian Sunrise said it was pleased to report that, in conjunction with an unnamed leading international contractor, it was looking to use technology new to Caspian Sunrise to deal with the issues present at both Deep Well A6 and Deep Well 801.

It said that at Deep Well A6, the principal challenge was establishing connectivity between the wellbore and the reservoir due to the presence of near wellbore damage caused by heavy drilling mud and previous perforating attempts.

“We now have a two-fold strategy to address and establish connectivity.

“The first part of the strategy utilises the technology referred to above, by seeking to perforate an interval of potentially oil-bearing rock using acid stimulation techniques, which do not require a rig.”

The second part of the strategy, if required, would involve the utilisation and application of more powerful, deeper penetrating perforating charges to help establish reservoir to wellbore connectivity.

Should that second part of the strategy be required, Caspian Sunrise said it anticipated that the work would be conducted in the fourth quarter, following the drilling of the A5 side-track.

At Deep Well 801, it said the issues were the blockages, first in the main well and then in the side-track already drilled to get around the pipes stuck towards the bottom of the main well.

The blockages resulted from the use of heavy-density drilling mud to contain the extreme pressures in the well.

“Until recently our approach in dealing with this was to use extremely powerful coil tubing equipment to clear out the well.

“We have now, in conjunction with a leading international contractor, decided to first attempt to clear the well ready for testing by the use of the same technology as at Deep Well A6.

“In particular, we will use the same acid treatment to both clear the well and to create longer than standard penetration of the potentially oil-bearing rock.”

As at A6, the board said that approach did not require a rig, and once started was expected to produce results later in the third quarter.

Among its shallow wells, at MJF the company said that now the licence upgrade had been received, it intended to commence a 10-well infill drilling programme, following which it expected production from the MJF structure to have increased to approximately 4,000 bopd.

Each infill well was expected to cost $1.2m, and to take up to two months to drill.

For reasons of economy, the board said it intended to purchase a “significant” portion of the equipment required for those shallow infill wells.

At the potential new structure, on which well 808 was drilled, two new intervals had been perforated, but to date without the discovery of commercial quantities of oil.

Perforation work was set to continue at intervals higher than those recently perforated.

Caspian Sunrise also announced that for the month of June, total production from BNG was 38,571 barrels, down from 42,434 barrels in May, and that the daily average production was 1,286 barrels, falling from 1,396 bopd a month earlier.

The average domestic sales price achieved was $19 per barrel, in line with May.

“The decrease in production volumes was expected and is the result of postponing much needed remedial work on the MJF wells,” the board said.

It explained that, now that it had received the MJF licence upgrade, it was in a better position to schedule the MJF well workovers to restore production to previous levels.

“The progress at BNG since our last update is encouraging and we look forward to reporting on the results from our use of the new technologies,” said Caspian Sunrise executive chairman Clive Carver.