During the six-month EPT, 868,000 barrels of oil were produced. Preparations are now well advanced to take the Basker Manta Project up to full field production levels of 25,000 bbl of oil per day in the second half of this year, the company said.

The Basker-2 well had initial flush production rates of more than 10,000 bopd achieved from about 11m of perforated interval. The same interval was produced for the full six months with production rates stabilising around 6000-7000 bopd.

Two cargoes of crude oil have already been sold previously and currently the Basker Spirit shuttle tanker has a cargo of more than 160,000 bbl of crude, which will be delivered to a major eastern Australian refinery. Total revenue of $A61.7 million generated by the sale of the initial two cargoes has already been received. The third cargo is expected to be sold for about $15 million.

Anzon said the EPT had shown that Basker’s oil-bearing sands are connected to the basin acquifer and pressure is maintained in the reservoirs by a water-drive mechanism. Therefore the original plan for gas injection for pressure maintenance is not required, so marketing of the solution gas can begin.

As scheduled, the Crystal Ocean floating production, storage and off-take vessel will sail for Singapore at the end of this month, where a compressor will be installed for handling of associated gas produced with the crude.

During the EPT, the gas was flared but during the full field production, expected to begin in the second half of 2006, the compressor will be used to compress the associated gas and reinject it into selected intervals in the Basker-3 well.

The reinjection is planned to continue until some time next year when export and sale of that associated gas is expected to start. The Manta and Gummy gas fields are still expected to be brought on-line in 2008.

The original concerns regarding the pour point of the Basker crude were found to be unfounded and no pour point depressant will be required during normal operations throughout the life of the field, according to Anzon.

No water production of any significance was recorded during the six-month test and the water-handling system on the FPSO could not be commissioned due to insufficient produced water.

Meanwhile, drilling of the development wells continues with the final well, Basker-4, currently drilling through the pay zone, according to Anzon.

“The three new Basker wells will be completed once the Basker-4 is drilled to total depth and all three new Basker wells will be flow tested,” the company said.

“Basker-3 will be completed as a gas injection/oil producer. Initially it will be used for gas injection and subsequently for oil production.”

The Crystal Ocean with the compressor installed is designed to have production capacity of 35,000 bopd. Once commissioning is completed, it is anticipated that from October 2006, average rates of 25,000 bopd will be maintained, allowing for scheduled cut backs for the departures by the Basker Spirit for delivery of crude cargoes to local refineries and/or for ship-to-ship transfer, estimated to take three or four days each month. (The storage capacity of the Basker Spirit is of the order of 680,000 bbl.)

Following the positive results achieved to date by the development wells and confirmation of the enhanced recovery potential from the reservoir with the presence of the water drive mechanism, the reserves update scheduled to be conducted in July/August is expected to yield an improvement to the currently stated initial proved and probable oil reserves of 30.1 million bbl, according to Anzon.

“While any increase in reserves is not forecast to contribute to increased daily production rates, however, it will extend the life of the oil project beyond the current forecast six years with the period of production without decline to beyond 2007,” the company said.

“Conducting the EPT to ensure the capability and efficiency of the innovative production system provided a low-cost, low-risk method of determining reservoir characteristics while at the same time generating significant revenue to assist with the funding of the full field development. The BMG Joint Venture is well satisfied with the achievements of the EPT and now looks forward with confidence to the start of full field production at average rates of 25,000 bopd later this year.”

The BMG Joint Venture comprises operator Anzon Australia, which holds a 50% stake and Beach Petroleum (50%).

However, Anzon’s takeover target Nexus Energy has been raising questions about the BMG production system’s suitability.

“Any full field development involving a production system designed for well tests carries significant risks,” Nexus told the ASX this week.

“Not only has Anzon failed to provide an independent valuation of its assets, it has also

continued to refuse to provide [the Nexus board] with full details of its project, including available cash flows, commencement date for full field production, money spent to date on the project and remaining money to be spent.”