block 430 map

Gents

Here's a map of ERH's blocks in the Sergipe Alagaos basin.

Link to SA basin map in PDF format

ERH have 40% stake in the 2 wells drilled so far having dirlled:

1) PTA-3 in block 330 in SSEAL-T4 (15m payzone)
2) 1N-1SE in block 430 in SSEAL-T5 (149m gross oil zone)

I'll quickly touch on the ann'mnt re: the basement etc.

Geologically speaking the SA basin abounds in rifts faults.

Here's a link to cross section

Over time sediments were deposited in a marine environment on top of the hard basement. Due to the plate tectonic forces involved, the basement develops plenty of fractures/cracks/faults which serve as trap for any organic matter i.e. oil/gas.

Basement hosted oilfields are being recognised as a good place to drill for oil although they have an element of risk associated, as in loss of circulation whilst drilling, if the fractures are connected.

From whats known, the 149m gross oil zone comes as a pleasant surprise. Further tests will reveal the true extent

Make no mistake 149m by far in a known oil province is huge & ERH been a small fish seem to have hit the jackpot.

SA basin also happens to b Petrobras backyard although they've shifted focus on Ultradeep to Deepwater giant fields recently.

Look fwd to next week.