Rift Oil PLC provides a further update on its Douglas Drilling Programme. On 26th May 2006 we drilled to the target depth of 1978 metres and have now had the opportunity to analyse the drilling results. Our conclusion is that we have a very exciting gas discovery. During the intervening period we have agreed the best way to attempt to advance the concession to commercialisation.
The Douglas-1 discovery has found potentially significant reserves of gas in a large structure with a maximum area of over 40 square km. It has also de-risked other similar looking prospects and leads on the licence (PPL235). It is our intention to proceed with a detailed feasibility study to determine a commercialisation strategy for this resource.
We initially considered conducting further tests on the drilled well, however the excellent MFT (Multi-Formation Tester) results indicate that there are two reservoirs (Alene and Toro) of sweet gas with good deliverability and likely moderate condensate content. Further testing would not reveal other significant factors and was therefore not felt to be appropriate.
In order to identify the extent of the reserves we need to improve our knowledge of the remaining large structures on the licence. We have to pinpoint the best place to drill the next well to maximise the return on our investment. This will be best achieved by fulfilling our existing commitment to undertake 50kms of new 2D seismic acquisition before August 07 as stated under the terms of the licence. Logistically, this is best carried out between September and November 2006.
The drilling rig that the Joint Venture acquired earlier this year has served us extremely well but is now not required by us until after the seismic study has been completed and analysed. We are therefore actively reviewing third party proposals to utilise the rig during this intervening period to generate revenue for Rift.
The audited results for the year ended 31st March 2006 will be announced in late August, 2006.
