CALGARY, ALBERTA, April 1st, 2013 – Sea Dragon Energy Inc. (“Sea Dragon” or the “Company”) (TSX VENTURE: SDX) is pleased to announce the following operational update for its recent work activities in Egypt.
The company’s net production in Egypt averaged 1,526 bopd in the month of January 2013 and has now reached 1,840 boepd (1,720 bopd and 120 boepd in gas and NGL’s). In NW Gemsa, oil production is averaging 9,900 bopd gross (990 bopd net), while gas and NGL’s are adding another 1,200 boepd gross (120 boepd net). In Kom Ombo, production is averaging 500 bopd gross (250 bopd net); while in Shukhier Marine the company is producing 480 bopd.
Over the past two months, Sea Dragon has also been able to collect a significant percentage of its aging receivables thus enabling it to reduce the receivables amount to $4.63MM and the age of its receivables to two months based on current production.
NW GEMSA CONCESSION:
Current production from the Al Amir SE and Geyad fields is approximately 9,900 bopd gross (990 bopd net). Total production, including solution gas and natural gas liquids, is approximately 11,100 boepd gross (1,110 boepd net). The concession has eight current oil producers at Al Amir SE field, two at Al Ola and five at Geyad. Cumulative production from the NW Gemsa Concession has now exceeded 10.6 million barrels of 42 degree API Crude oil.
Water injection is ongoing with three injectors currently operating at Al Amir SE Field and one injector at Geyad Field. Current total injection rates are approximately 17,800 bwpd. Cumulative injection to date is 6.9 million barrels at Al Amir SE and 1.7 million barrels at Geyad.
Al Amir SE-16 Well:
This well is now being completed as a Shagar water injector. The well was spud on February 28, 2013 and successfully drilled to its total depth of 11,000 feet in the Upper Rudeis Formation. It encountered 27 feet of good quality wet sand in the shagar member of the Karim Formation in the interval 10,807.5 to 10,834.5 feet. This well will add another water injection point in the field, which will improve sweep efficiency and maximize oil recovery.
Beyond the completion of Al Amir SE-16, future plans at NW Gemsa include the drilling of two additional water injectors, one producer and one exploration well in 2013.
The NW Gemsa concession is located onshore on the west side of the Gulf of Suez, approximately 300 km southeast of Cairo. Two main oil fields are producing light oil, the Al Amir SE field along with the Al Ola extension to the south and the Geyad field to the north. Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas oil and gas at 50%, as operator and Circle Oil PLC with 40%.
SHUKHEIR MARINE CONCESSION:
The Shukheir Marine Concession contains both the Shukheir Bay and Gamma development leases.
Current production from the concession is 480 bopd. Sea Dragon is the sole owner and operator of the concession.
Shukheir Bay #5 Well Work-over:
Following the successful completion of work-over operations on this well, it has now recovered its kill fluid and restored its pre work-over production of 380 bopd. The SHB-5 well produces from the Upper and Lower Rudeis sands within the Shukheir Bay field. The well began production in 2006 and has produced over 1.1 MMbbl of oil to date.
The company continues to plan an acid stimulation treatment in the Gamma #1 well which may add 100 bopd.
Exploratory drilling opportunities also exist in the Gamma lease, prospecting the prolific Nubia Formation and in the Shukheir Bay lease in the Upper and Lower Rudeis Formations. The Company is currently re-mapping its 3-D seismic coverage in the area to evaluate these opportunities.
The Shukheir Marine Concession is located in the shallow offshore waters of the Gulf of Suez approximately 300 km southeast of Cairo. Following the acquisition of 100% interest in the concession which contains both the Shukheir Bay and Gamma oil fields, Sea Dragon began a comprehensive review of the upside potential believed to still exist in both fields.
KOM OMBO CONCESSION:
Current production from the Al Baraka field is approximately 500 gross (250 net) bopd.
Plans are to monitor production from West Al Baraka-2 and then if warranted commence an appraisal/development drilling program which could involve the drilling of up to three new wells.
The Kom Ombo Concession is located onshore in the southern part of Egypt some 1,000 km south of Cairo. It contains the Al Baraka and the newly discovered W. Al Baraka oilfields, producing light oil from multiple reservoirs. Sea Dragon owns a 50% working interest and is a joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50%.
Certain statements contained in this press release constitute “forward-looking statements” as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the 2012 drilling and capital expenditure programs of the NW Gemsa and Kom Ombo Concessions and the results referenced or implied herein should be viewed as forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as “forward-looking statements”. All reserves information contained herein as well as the net present value of such reserves should be considered as forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, costs and timing of exploration and production development, availability of capital to fund exploration and development and political, social and other risks inherent in carrying on business in Egypt. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.
Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and the Corporation undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law. Although Sea Dragon has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Actual results may differ materially from those currently anticipated. See Sea Dragon’s Annual Information Form for the year ended December 31, 2011 for a description of the risks and uncertainties associated with the Company’s business, including its exploration activities. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
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