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From: Nigel
ArtDate: 11th October 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 84.9.59.210
Date: 25/10/06
Time: 21:34
11th October 2006
Rheochem - Drilling Results from North Sea Investment
News Item - Conduit PR
Athena 14/18b-15 well- . Electric logs indicate that the well has intersected a total oil column of 632 feet in the Upper Leek formation 10% ownership by Zeus Petroleum Ltd (Rheochem holds 33.3% strategic investment in Zeus) Rheochem announces results from Ithaca Energy Inc, the operator of North Sea Athena 14/18b-15 well in the outer Moray Firth area. Drilling has reached total depth of 11,051 feet with electric logs indicating that the well intersected a total oil column of 632 feet in the Upper Leek formation. Rheochem owns 33.3% of Zeus Petroleum which in turn has a 10% interest in the Athena 14/18b-15 well operated by Ithaca Energy.
The well was drilled on time and on budget at a high angle of 60 degrees from vertical through the Lower Cretaceous Upper Leek reservoir and encountered the reservoir 50 vertical feet higher than the nearby 14/18-7 well that tested 850 barrels of oil per day (bopd).
The 14/18b-15 well intersected 632 feet of gross oil-bearing sandstones at the 60 degree angle drilled, representing 329 feet vertical. Electric logs and other well data received to date indicate that this interval contains 253 feet of net porous oil bearing sands representing 127 feet vertical.
Porosities in the oil column range from 12 % to 20 % with an average of 16.5%. A 32 foot core was recovered and in correlation with the electric logs, the reservoir parameters as observed are of higher quality than the 14/18-7 well.
Currently, production casing is being run to the total depth drilled and will be perforated for testing purposes. It is anticipated that testing will require approximately 9 days and will commence while the rig is on location. Depending upon the successful results of the tests, the well will be suspended for future production.
Ithaca is the operator with the beneficial interest of the participating companies being 70% Ithaca, 20% EWE Akteingesellschaft (EWE) and 10% Zeus Petroleum (previously Wimbledon).
Haydn Gardner, CEO, of Rheochem commented:
"In addition to providing drilling services to the natural resources industry I believe our aim of building a portfolio of strategic investment directly into oil and gas assets with near term production potential will significantly leverage value in Rheochem. Subject to successful testing I look forward to further results from Ithaca as they seek to define this discovery.”
For more information:
Haydn Gardner, CEO Rheochem +44 (0) 20 79877511
Laurence Read / Leesa Peters +44(0) 20 74296666 Conduit PR
OVERVIEW OF Zeus
Zeus has an interest in ten licence blocks (two partial blocks) located across the central North Sea Basin of the UK Continental shelf covering an area of approximately 2,000 km2. These are comprised of 4 traditional blocks with a 10% interest and 6 Promote blocks with a 100% operated interest.
The licence blocks include the Athena oil discovery and a further 19 prospects and leads in a variety of hydrocarbon plays.
Athena
Zeus has a 10 % interest in licence P.1293 covering this discovery. The operator and 70% interest owner is Ithaca Energy.
The Athena discovery is on block 14/18b and is located immediately west of the Claymore and Scapa fields and therefore close to existing infrastructure. It has been independently reviewed by Gaffney Cline Associates and considered a probable development with low to mid case gross reserves estimated around 24.4 MMbbl oil. (2.4 MMbbl to Zeus).
Drilling of an appraisal well on Athena has been completed and confirmed the presence of oil in substantial quantities. Subject to successful testing, further drilling to develop the accumulation and the application for field development is planned.
Triton and Poseidon
Zeus has a 10 % carried interest in the licences covering the blocks 13/16b, 13/17 and 13/18 which contain the majority of the Triton and Poseidon leads. This carry may be reduced subject to a future farm out agreement by Ithaca.
These leads were described by Ithaca in their 12 July 2006 release to the London Stock exchange as follows:
“Triton and Poseidon are the two largest 2D seismic mapped leads in Ithaca’s portfolio and are of a highly attractive stratigraphic play type, with the large upside potential within the prospective Upper Jurassic Buzzard and Lower Cretaceous fairways. Independent consulting firm Gaffney Cline and Associates (‘GCA’), in its report for the company’s recent public offering, has ascribed gross unrisked recoverable Prospective Resources of between 50 to 500 million barrels of oil with a best estimate of 150 million barrels to Triton and gross unrisked recoverable Prospective Resources of between 50 to 400 million barrels of oil with a best estimate of 100 million barrels to Poseidon.”
Ithaca recently completed an extensive 3D seismic group shoot covering the licences it holds on blocks 13/16b, 13/17 and 13/18 to reduce the uncertainty and mitigate risks associated with these leads.
Subject to the results of the data interpretation and rig availability, Ithaca has stated that it plans to drill a well on one of the blocks containing these leads in 2007.
Other Assets
Zeus was awarded the following blocks under Promote licences in the 23rd UK Seaward Licensing rounds and has a 100% interest:
block 14/11, P.1289 blocks 12/15, 13/11, 13/12 & 13/13, P.1393 block 17/7, P.1396
A Promote Licence gives the company 2 years from date of issue to attract technical, environmental and financial capacity to complete an agreed work program which includes the requirement to drill a well within the following 2 years. These Promote licences will expire on 22/12/2007 if an acceptable work program is not agreed.
In accordance with AIM Guidelines, Haydn Gardner, MD of Rheochem, is the qualified person that has reviewed the technical information contained in this press release
Edward Portman Conduit PR Ltd 76 Cannon St London EC4N 6AE Office: +44 (0) 20 7429 6666 Direct: +44 (0) 20 7429 6607 Fax: +44 (0) 20 7429 6699 Mob: +44 (0) 773 3363 501
www.conduitpr.com
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