Centurion Energy International has reported that drilling operations have commenced on the Sidi Mehrez #1 well in on the Grombalia Permit in Northern Tunisia. It is expected the well will reach total depth in approximately 20 days from spud date, at a net cost to Centurion of approximately $1.4 million.
The well will be drilled vertically to a total depth of 1,440 meters to test a look-alike structure to the Al-Manzah and Belli oilfields. The primary target is in the Paleocene Bou Dabbous reservoir, expected at 1,320 meters. The Bou Dabbous reservoir at Al-Manzah currently produces approximately 1,850 barrels of oil per day and had produced in excess of 1.3 million barrels of oil since being brought on stream.
The Belli Field also produced from the Bou Dabbous reservoir and produced over 8.0 MMBO before the field watered out. Should the Sidi Mehrez well discover commercial oil, Centurion has significant follow-up exploration potential, as five similar prospects have been identified on company lands. Oil production from the area would be marketed to the nearby Bizerte refinery.
Commissioning and load testing operations of the SEED power plant, transmission line and tariff metering station are ongoing. Final regulatory and administrative approvals required for power generation are also being obtained. Once operational, the plant is expected to add approximately 525 barredl of oil per day (bpd) to Centurion's production levels.
The other major positive impact from this project was the elimination of approximately five million dollars of Tunisian income tax liability, as expenditures made by Centurion on the plant constituted qualified expenditures under a Tunisian program for income tax credits.
Strong production levels and high commodity prices have continued to result in strong cash flows for Centurion with each month's production proceeds improving the company's working capital position. Centurion's present debt consists of $10 million drawn on the $720,000 Standard Bank line of credit, representing the remaining three payments on the service company advances for the 2001 Egyptian drilling program and $10 million on non-recourse project debt for the SEEB power project which debt is only secured by the power plant assets.
The SEEB project cash flow will service the power plant debt and still provide positive cash flow to Centurion. Centurion's debt, not including the non-recourse project debt, is less than one-half of the projected 2003 exit yearly cash flow. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
