uganda press on the gbp drilling

http://allafrica.com/stories/201001120048.html

Uganda: Drilling of Second Arua Oil Well for February
Frank Mugabi
11 January 2010

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Kampala NEPTUNE Petroleum, the firm exploring for oil in the West Nile region, will start drilling a second oil well in February.

This is a New Year's gift to residents who had been waiting nervously since the first oil well was abandoned last year due to lack of commercially viable hydrocarbons.

It has emerged that the firm and the Government have also already agreed on the site of the new well, located 3km north-west of Rhino Camp town in Arua.

Code-named Avivi-1, the new well is a few kilometres from Iti-1, the first exploration well that was abandoned in June last year.

Peter Kingston, the firm's executive chairman, said in a statement they were confident of the prospects at the new site.

"Avivi-1 is well placed to have good quality reservoirs and proximity to the most likely source and migration paths."

He added that the results of the Iti-1 well and subsequent evaluation had helped them understand the exploration area basin.

Kingston said first results from the second well were expected at a primary stratigraphic target interval below 702 metres and the second target interval at 833 metres deep. The well is expected to take about two weeks to drill.

Kingston explained that a higher interval was targeted because it contained high quality fluvial sandstones like those found in the successful wells in exploration area one in Hoima, but which were absent in Iti-1.

He added that the deeper prospective interval may also have alluvial sandstones similar to those found in the basal reservoir at Iti-1 but of better quality.

Neptune spent over $8.5m on the first well and drilling of the second well is expected to cost about $7.5.

Meanwhile, the firm has signed a contract with Oil & Gas Exploration Company Cracow (OGEC) for a land rig to use at Avivi-1.

The rig had been engaged in an effective recent drilling programme in exploration area one and two with 15 wells.

Tower Resources, a London-based oil and gas firm that owns Neptune, has already raised £7m for the second oil well project.

Global Petroleum, the majority funder of Iti-1, is contributing 25% of the cost.

Kingston commended the firm for the decision, adding that funding for the second project had been fully secured.

He also cast a ray of hope about the abandoned Iti-1 well.

"After detailed re-evaluation of the data and samples from the well, it has been concluded that Iti-1 contains oil in a 15-20 metre net interval within a 35 metre gross basal sandstone reservoir situated on basement," he said.