PetroEnergy joint venture discovers oil in offshore West Africa

MANILA, Philippines - PetroEnergy Resources Corp. said a joint venture in the Etame oil field has uncovered oil in offshore Gabon in West Africa.

In a disclosure to the Philippine Stock Exchange, PetroEnergy said Vaalco Energy’s Southeast Etame 1 exploration well was drilled “to a total depth of 2,757 meters and encountered five meters of Gamba sandstone which logged oil full to base.”

PetroEnergy holds a 2.34 percent stake in the Etame field.

Vaalco operates the Etame Marin contract with a 28.07 percent net interest alongside other partners Addax Petroleum Etame Inc. (31.36 percent), Sasol Petroleum Etame (27.75 percent), Tullow Oil (7.5 percent) and Sojitz Etame (2.98 percent).

“The Gamba sandstone section encountered in this exploration well is the same reservoir that produces in our Avouma/South Techibala, Ebouri and Etame oil fields,” PetroEnergy said.

According to PetroEnergy, the consortium is proceeding to sidetrack the well to confirm the extent of oil accumulation and define the oil/water contact in the Gamba sandstone. The sidetrack is anticipated to take approximately 22 days to drill.

“The oil discovery about five kilometers of our existing floating production and storage facilities, (FPSO) has the potential to open up a new filed in our Gabon contract area,” PetroEnergy said.

PetroEnergy said an additional sidetrack may be necessary to further delineate the prospect.

“If the Southeast Etame prospect proves to be commercial, it is expected the new field can be developed and tied back to Vaalco’s existing FPSO facilities,” PetroEnergy said.

“The ETSEM-1 well has been deepened to investigate potential Dentale sand reservoirs below the Gamba sandstone section. Although some hydrocarbon shows were encountered, the initial assessment is the Dentale sands are primarily water-bearing at this location. However, logging activities are underway to further evaluate the Dentale sands,” PetroEnergy added.

PetroEnergy is engaged in the provision of specialized technical services to companies exploring for oil. The principal properties of the company consist of various oil areas located in the Philippines and in Gabon, West Africa. Aside from the Etame Oil fields, the company’s other operations in Gabon include the Avouma-Tchibala and the Ebouri oil fields.

In the Philippines, PetroEnergy has a working interest in Block C of SC 14 situated in offshore Northwest Palawan where oil discoveries were made. The company has crude oil as its product and contributes about 99.33 percent to revenues for the year ended Dec. 31, 2009.