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PSC 3104 is approximately 200km from the west coast of Madagascar. The Tsimiroro field was first drilled in 1909 and 13 degree API oil was discovered at a depth of 40m to 300m. Various drilling campaigns by several operators added 75 wells to the field, but found difficulty in defining the reservoir correlations.
In late 2007 Weinman Geoscience conducted a detailed field analysis, clarifying the main Tsimiroro Field area, including the most densely developed area referred to as TO-1, and identified drilling prospects in 32 new structures. In 2008 Madagascar Oil was able to drill wells in 15 of those structures and found significant oil in 14.
In 2008, Madagascar Oil also completed construction of a production test facility in the TO-1 field area. Three Amboloando wells in the TO-1 structure were subjected to steam injection and placed on production. Each of the wells produced a few barrels of oil prior to steam. After stimulation, the wells returned to production at peak rates of 150 to 200 barrels of oil per day. The wells exhibited a classic stimulated production decline and Madagascar Oil estimates that the field can be successfully developed utilizing a conventional vertical pattern steam flood.
In early 2009, Netherland Sewell incorporated new data from 2007 and 2008 Madagascar Oil drilling, to update their prior study in 2006, and projected Original Oil-In-Place (“OOIP”) at a high of 5.5 billion barrels in 24 field structures. Netherland Sewell also concluded that 4 of the structures contained a most likely (2C) OOIP of 940 million barrels and a total Contingent OOIP of 1.78 billion barrels. Assuming a 940 million barrel figure, the field could produce 50,000 barrels per day for over 15 years and recover approximately 700 million barrels over an estimated 40 year life.
Work is underway to drill 24 wells in the field in 2010, which will afford the opportunity to test the 17 Weinman structures not yet drilled, that have an estimated volume of 4.6 billion barrels. It is anticipated that these efforts will increase the OOIP and recoverable resources estimates and could substantially increase the size of the project. The Company has also mobilized a team to improve structural data across the field by running 500km of Electrical Resistivity Tomography (“ERT”) to further define the potential production areas. The map below indicates the location of the various structure categories within the Tsimiroro Field.
Madagascar Oil is also aggressively pursuing installation of a nine pattern pilot project in 2010 to test the viability of using conventional pattern vertical multi layer steam flood in the Tsimiroro field. The project is expected to start production in late 2011 and will run approximately two years to acquire data that will resolve numerous reservoir performance uncertainties that should de-risk the decision to proceed with a full development of the field.
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