This unusual company – listed on the ASX and the London AIM markets, and focused on exploration and production in Central Europe – says it expects to bring its Janovice gas field in the Czech Republic on tream in the next few weeks at a rate of 880,000 cubic feet a day.
This will add to the cash flow generated by its nearby Krásná oil field which is producing a modest, but lucrative 100 barrels a day. Both oil and gas are being marketed in neighbouring Poland.
The company is also drilling an appraisal well on a separate fault block in the Janovice field and expects to run seismic surveys over two exploration prospects elsewhere in the country this year.
Carpathian has concentrated on the Czech Republic since the company’s formation in 1997. Its rationale is to follow up leads and prospects ignored during the communist era when the country was part of the Soviet Union communist satellite state of Czechoslovakia.
Since regaining control of its destiny in 1993, the Czech Republic has taken the privatisation path to unlock its petroleum potential via local companies with the help of foreign finance and expertise.
Although Carpathian has a majority share of Janovice at 60%, the field development program is being operated by 40% interest holder Unigeo a.s. which is the former state-run geological survey department, now owned by an insurance company.
The Janovice gas field was discovered and evaluated under the former communist regime. Recoverable reserves were established within the area of the two discovery wells but no production occurred.
Carpathian and Unigeo followed these two wells with the Ja-3 well which encountered a 3.8m thick gas sand in a fault trap structure. In 2004 they moved up dip with Ja-3a and found a greater thickness of the same sand separated by a shale section from an underlying sand which also contained gas. The total gas column was 33m thick.
Ja-3a was pressure tested in May this year and the structure estimated to contain 1.5 billion cubic feet of reserves. A pipeline spur connecting to the main gas transmission system was completed in September. That spur line is now in the final weeks of commissioning.
The current Janovice Ja-11 appraisal well is located about 1.5km northwest of the discovery and targeting a separate fault block first noted with a well called Ja-9 originally drilled to test the structure further updip from Ja-3a. Ja-9 clipped a thin 2m gas column in the top sand, but found no gas in the underlying reservoir suggesting the presence of an upfaulted block.
Ja-11 is located even further up-dip to try and locate gas in the second reservoir. Originally to be called Ja-9a, the numbering system was changed to Ja-11 when examination of reprocessed seismic indicated the optimum location for the well would be too far from Ja-9.
The seismic also drew attention to a more complicated faulting system than first realized. Ja-11 is targeting a pinch out of the Karpat Sandstone reservoir against a central nose of underlying Palaeozoic basement sediments. If the well is successful it is likely other wells will be drilled on a series of individual pinchouts seen around the same central nose.
The Ja-11 block has potential to hold up to 6.5 billion cubic feet of gas. The well lies just 1km from the new Ja-3a spur line which will improve the economics of any discovery.
Carpathian is also planning several short 2-D seismic surveys in the Rožnov region 25km to the southwest where previous work has indicated high amplitude anomalies in conjunction with delineated deep-seated structures about 2000m-300m below the surface. Most exploration to date has focused on the shallow structures down to 1000m.
A further 100km of 2-D seismic will be acquired in the Morava district in the northern part of the Vienna Basin looking for stratigraphic and structural traps. The company points out that OMV found 140 billion cubic feet of gas reserves in a Vienna Basin prospect earlier this year. All gas found in central Europe has a ready market.
In the meantime Carpathian is continuing to monitor its 75% owned Krásná field which is producing oil from two wells, although the flow is complicated by intermittent slugs of water and gas. There is speculation that the position of the perforations in the reservoir zone may be misreported and they may actually be in a transition zone.
Gas produced in the slugs is being flared at the moment, but there is discussion about the potential for re-injection and commercial production at a later date.
At the moment, though, the focus is on maximising oil flow. Despite the problem of high water cut and some gas, 100 barrels a day of net oil represents a very significant cash advance for Carpathian at the current high prices.
