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Oil Gas Africa: SacOil Reports Exciting Drilling Results

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17 Dec 2015

In September of this year, SacOil announced the phase 2 kick-off of an intensive development programme of their Lagia Oil Field in Egypt. In addition to the installation of steam facilities to enhance production from the existing production wells, plans included the drilling at least five additional thermal wells to further increase production from the field. To date, three wells have been drilled (Lagia 11, 15 and 16) - all yielding positive results. Lagia 11 and 16, both drilled to a depth of approximately 1,430 ft, respectively encountered 213 ft of gross oil from the known productive Nukhul formation.

Whereas this is certainly good news for SacOil's management and shareholders, the results from the second drilled well (Lagia 15) is of even more interest to SacOil's technical team. Lagia 15, located approximately three kilometers south-east from the main cluster of producing wells, was drilled to a depth of 1,820 ft below drill floor. The well intersected the Nukhul formation as well the Thebes formation and discovered producible oil in both formations.

Earlier surveys from the 1990's suggested the oil-bearing potential of the Thebes formation. The Nukhul formation is at a shallower stratigraphic level than the Thebes formation, and has been the source of all oil recovered from the field until now. Since January, the Nukhul formation has produced oil with a gravity of typically between 11 and 13 API.

Preliminary results indicate that the discovery in the Thebes formation is of a higher API gravity as compared to the oil produced from the Nukhul formation in Lagia, essentially making it a higher-priced oil. The Company said in a statement that the API gravity of the Thebes is above 24 API gravity, which is more than enough to excite any oil-producer.

Bradley Cerff, SacOil Group Executive Operations, says that the technical team had good cause to pursue an investigation of the Thebes formation and that the location of Lagia 15 coincided with information gathered from historical data. He cautions that further analysis is required before making any assumptions on the commercial viability of the oil discovery. "We will now evaluate and investigate the Thebes formation further to understand the potential of the accumulation of oil in the formation. This may even include the drilling of additional wells to further appraise the potential ", Cerff adds.

When asked about how the discovery impacts the existing development plan at Lagia, Cerff is clear: "This discovery does not threaten the significance of the Nukhul formation to our existing development plans. The Thebes discovery does potentially open up a new play for SacOil and will add to our reserves portfolio following a thorough evaluation process. This, in turn may lead to an expansion of our development programme, but the Nukhul formation still has much to offer and we will continue our field development as planned. “

Lagia 11 has since been placed in production with Lagia 16 to follow shortly. Cerff says that a decision on Lagia 15 in this regard will be made after concluding the evaluation of the Thebes oil.

Dr Thabo Kgogo, Chief Executive Officer of SacOil, commented, "The discovery of a light oil in the Thebes formation is very significant for the Lagia assets and for SacOil as a company. We are certainly pleased with the initial results. The evaluation of these well results should provide us with an even better understanding of the potential stabilised production rates from each well and the field as a whole.”