Here's the Quarterly to 31st March with Borsano...

Here's the Quarterly to 31st March with Borsano highlighted.
Nothing heard since - but there is more than enough to keep KEY uptrending for months I would think!
Happy days....
The market will only take it in slowly imo....

ACN 120 580 618
Level 1, 14 Outram Street
West Perth
Western Australia 6005
Tel. + 61 8 9327 3500
Fax: + 61 8 9327 3510
e-mail: [email protected]
QUARTERLY REPORT
For the Quarter Ended 31st March 2008
HIGHLIGHTS
TANZANIA
�� Kiliwani North #1 exploration well spudded on 23rd February 2008. The well
intersected a gross gas column of 60 metres and a new Tanzanian gas
discovery was declared.
�� Kiliwani North #1 drilled and completed as a production well ahead of
schedule and under budget. The casing over the gas interval was perforated
with strong pressures recorded. A well testing programme will be undertaken
in the next quarter to determine gas flow rate capacity, reservoir properties
and gas composition.
�� Kiliwani North #1 commercialisation process has commenced and
discussions with potential gas customers in Tanzania are ongoing.
�� Preliminary technical evaluation of the Kiliwani North #1 results indicates the
well intersected a gas-water contact deeper than at the adjacent Songo-
Songo Gas Field indicating, when combined with other well data, a separate
gas accumulation was discovered. A positive outcome with potential for the
other exploration prospects and leads in the Nyuni Block.
ITALY
�� Number of meetings held with the governmental authorities to progress the
Environmental Impact Assessment studies submitted for the four offshore
application areas.
�� The preferred drilling location for the Borsano onshore permit is being
evaluated by local drilling personnel. The approval process is expected to
take longer than expected due to location’s proximity to industrialized area
north of Milan
SURINAME
�� Five well exploration campaign scheduled in Coronie Block during fourth
quarter 2008. This follows the initial drilling campaign in the Uitkijk block in
which three of five wells encountered hydrocarbons.
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NEW VENTURE: NAMIBIA
�� Consortium Agreement signed with Pancontinental Oil & Gas NL (ASX code
PCL) for joint petroleum exploration activities, offshore Namibia.
�� Pancontinental Oil & Gas NL has applied for their Reconnaissance Licence
No. 1 of 2007 to be converted into a Petroleum Agreement (PA) and
Exploration Licence (EL).with Key to hold a 50% participant in any successful
award.
EXPLORATION ACTIVITY
OFFSHORE TANZANIA
Nyuni Block ( Key 20.0% )
Kiliwani #1
Kiliwani #1 exploration well, drilled through the expected Neocomian aged reservoir
section with an 8-1/2” bit reaching a total depth of 2570mMD on 7th February 2008. A
number of sands were encountered over the target section in the well together with
minor background gas. Electric wireline logging and pressure recording was
performed over these intervals, however, results indicated that the primary
Neocomian target did not warrant further investigation, at this location, as no
commercial hydrocarbon zones had been identified. The well was subsequently
plugged and abandoned with the drilling rig released from the well location on 13th
February 2008.
An initial technical review of results indicated that the main reason for the lack of
success in this well was that the Neocomian target sands were encountered too deep
and below the gas water contact (GWC) of the adjacent Songo Songo Gas Field.
Kiliwani North #1
The Kiliwani North #1 exploration well spudded on 23rd February 2008 following the
relocation of the Caroil #6 drilling rig from Kiliwani island to Songo Songo Island.
This well successfully intersected a gross gas column of 60 metres in the Neocomian
sandstone reservoir objective, the same producing reservoir as in the nearby Songo
Songo gas field. Electric logging, gas logging and formation pressures taken within
the well confirmed the presence of the gas interval. Drilling of the well was also a
technical success with the well being drilled ahead of schedule to a total depth of
2030 m RT (6,687 ft) which was reached on 13th March 2008.
Preliminary evaluation of results indicated importantly that the gas-water contact was
deeper than that observed at the adjacent Songo-Songo Gas Field. This, combined
with the other data gathered, demonstrates that this deeper gas-water contact in the
Kiliwani North #1 discovery well is in a separate structure and gas accumulation
compared to the Songo-Songo gas field.
The well has also confirmed the presence of potential sandstone reservoirs in the
Tertiary section which will likely be a target in future wells drilled in the area. The
Kiliwani North gas discovery further enhances the prospectivity of the remaining
leads and prospects within the Nyuni Block.
The Nyuni joint venture Operator, Ndovu (Aminex), officially notified the Tanzanian
Petroleum Development Corporation (TPDC) of the successful gas discovery at
Kiliwani North #1 on 17th March 2008.
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The close proximity of Kiliwani North #1 to the Songo Songo gas processing facility
gives confidence that this discovery will be economic and commercialized in a
relatively short period of time. The commercialisation process of the well will initially
involve a well test that will be conducted to determine flow rate capacity of the well,
reservoir properties and additional gas composition data. At the time of writing this
report, delays in the mobilisation of the well testing equipment from Middle East
shipping ports meant this well test is now scheduled to take place during the first half
of May 2008.
ONSHORE SURINAME
Uitkijk and Coronie ( Key 1.75% )
The Company is participating in a multi-well drilling programme in Suriname, through
its 50% shareholding in Portsea Oil & Gas Pty Ltd, which has a 3.5% free carried
interest through an agreement with Hardman Oil and Gas Pty Ltd, a company owned
by Tullow Oil Plc. Both areas are located adjacent to Suriname’s main producing oil
fields, Tambaredjo and Calcutta.
The Joint Venture is to commence a five well exploration campaign in the Coronie
Block, to the west of Tambaredjo, during the fourth quarter. This is following on from
the initial drilling campaign in the Uitkijk block, east of Tambaredjo, where three of
five wells encountered hydrocarbons. The project participants are currently
undertaking a number of technical studies to determine physical well locations.
ONSHORE ITALY
Borsano Permit ( Key 100% )
The Company has continued to perform technical studies and undertake evaluation
of the area. A drilling proposal has been prepared and is currently being reviewed by
the Company’s Italian operations team.
The Company is also working with its Italian consultants and the relevant
governmental departments to develop a drilling location and to put in place the
necessary approvals required. This is proving to be a time consuming affair due to
the need to comply with local rules and regulations. Process is taking longer than
expected due to location’s proximity to industrialized area north of Milan.
OFFSHORE ITALY
Application Areas ( Key 100% )
The Company has interest in four application areas as follows:
Lampedusa d 341 C.R–.PU Application
Lampedusa d 342 C.R–.PU Application
West Sardinia d 90 E.R-.PU Application
Elba d 91 E.R–.PU Application
Environmental Impact Assessment studies (EIA) for each area are currently being
evaluated by the Ministry and the Company is awaiting their final response and
approval. A number of meetings have been held recently in Italy with the relevant
governmental bodies to respond to questions raised.
Technical evaluation work has continued in parallel with the EIA process with the
Company working closely with its Italian technical specialists working together
evaluating geological and geophysical data.
3
The technical focus now for these areas is detailed geophysical mapping.
NAMIBIA - NEW VENTURE
Reconnaissance Licence No. 1 of 2007
Application - Exploration Licence and Petroleum Agreement ( Key 50% )
The Company has signed a Consortium Agreement with Pancontinental Oil & Gas
NL (ASX code PCL) for joint petroleum exploration activities offshore Namibia.
The two companies believe that the area holds significant oil exploration potential
and have been jointly studying existing regional geological and seismic data for some
time.
Pancontinental currently holds a Reconnaissance Licence, No RL-1 of 2007 (‘RL’)
covering an area of approximately 30,000 square kilometres, offshore from the coast
of Namibia, in an area known as the Walvis Basin. The joint venture partners are now
applying for this RL to be converted into a Petroleum Agreement (PA) and an
Exploration Licence (EL) and Key has agreed to be a 50% participant in any
successful award.
Offshore Namibia is an extension of the West African continental margin, which hosts
prolific oil and gas producing areas such as Nigeria and Angola. Activity in the area is
now increasing with companies such as Hunt Oil, BHP Billiton and Tullow Oil
acquiring licences along the Namibian coast. Another company, the Russian
company, Sintezneftegaz, is currently drilling on behalf of a consortium of
companies, to the north of the RL area in 762m of water.
Under the terms of the joint venture agreement between Pancontinental and Key,
Key will pay Pancontinental, on completion of a number of conditions, up to
A$100,000 in reimbursement of past expenditure and will share in certain future
costs.
ENQUIRIES
Please direct any queries to:
Ken Russell - Managing Director / CEO;
Phone Direct : + 61 8 9327 3500
Fax. : + 61 8 9327 3510
E-mail : [email protected]
or
Media
Ian Howarth – Farrington National
Phone Direct : + 61 3 9223 2465
NOTE: In accordance with ASX Listing Rules, any hydrocarbon reserves and/or drilling update information in this report has
been reviewed and signed off by Mr. Ken Russell, Managing Director/CEO of Key Petroleum Ltd, who has at least 5 years
experience in the sector. He consents to that information in the form and context in which it appears.