Sorry guys about the date, its 12/01/09, not 08, as ciggy has...

Sorry guys about the date, its 12/01/09, not 08, as ciggy has identified.

Part of the contract with the anp (brazilian regulator) is on the first yr to spend money on 2d or 3d seismic, which has occurred and then you have two yrs to sink a well on the target.

we are going to drill two wells one after each other, one on block 59 and one on block 138

Block 59 is the one i am most excited about. If you look at the seismic's, its a classic up-dip prospect, where the oil could come to the surface under its own pressure. Therefore production rates could be a lot higher than 330 and 430, at 1,000bod per well and more. Oil around the area is in between 25 to 35 Api, therefore of excellent quality. Every refinery in the world would take the oil and pay a small premium to oil prices. Block 59 has had a well drilled historical close to the drill hole (4km away from memory) that encountered at the time noncommercial oil shows. So there is oil there, didn't hit the sweet spot. Looks like they might have sunk the well on the boundary of the prospect. The previous drill hole was only targeting the turbinate sand structure. The 430 well was targeting the turbinate sands as well, however it didn't find oil there. It was found on the three layers below. Block 59 has from looking at the seimics a similar if not same structure as 430. My feeling are the structures are possibly bigger than block 430. In the mercury report block 59 was the biggest target owned my erh at 8mb recoverable. Block 330 was suppose to be only 1.4mb recoverable and its turned into 18mb recoverable.

If in doubt alway refer back to the mercury report prepared my John Weston, it has a wealth of knowledge on all of erh's prospects