The company today said it was experiencing problems at four of its six wells in the program, which involves re-entering them and performing horizontal completion targeting a more substantial exposure to the reservoir in each well.

The Turkish-focused producer said there had been known difficulties at the first two attempted wells – 45 and 44 – that had not been cased to an adequate depth to contain spalling of shale into the well bore.

Past operators have previously suspended both wells.

“Current attempts to restrain shale with cement plugs did not alleviate the problem and Incremental now plans to re-engineer these wells to include an expandable liner inside the casing to a depth within the reservoir section,” the Perth-based company said.

“This will require time for well design and equipment sourcing, so further drilling of these wells has been be deferred until the 2007 campaign.”

It said the original well 41 has “similar design problems” and will also be deferred to a future program.

A number of drill pipe failures have also occurred at the program’s well 36 after two USR drill holes placed “substantial stresses on the pipe”.

Incremental said it has now suspended the first hole because of the ongoing risk of drill pipe failure, but plans to continue drilling the second.

After well 36 is completed, two more wells will remain on the program, the company said.

Despite the difficulties, managing director Gerry McGann said the company plans to persist with the program.

“The operational challenges have not reduced our belief that USR drilling technology remains appropriate to boost production at the Selmo field,” McGann said.

He said project costs to date have reached about $2.4 million, which were “well within” original cost estimates.

The total 2006 USR program in Selmo is budgeted around $4 million for six USR wells.

The current program is expected to continue until the end of next month.

Incremental listed on the Australian Stock Exchange last October, after raising $61 million in an initial public offering. It used the funds to finalise its purchase of a 100% working and revenue interest in the production and exploration licenses for Selmo, along with other exploration areas in Turkey.