Under the terms of the agreement, the MND Group committed to over $100 million in capital expenditures to fund the development of the Ninotsminda
, Manavi and Norio assets.
Development of the Ninotsminda
Field and neighboring fields for which CanArgo holds licenses will be the first priority for the combined company to be followed by Fountain's Stynawske project in Ukraine and the Gorisht-Kocul project in Albania.
9% interest in Ninotsminda
Oil Company Limited, which holds a production sharing agreement for the Ninotsminda
field, the West Rustavi field and the Manavi prospect, all located in the independent Republic of Georgia.
On the Ninotsminda
N97H horizontal well, drilling has now been completed with a 534 metre (1,725 feet) horizontal section having been drilled through the Middle Eocene reservoir where good mud losses were observed, these indicating good permeability.
CanArgo has decided to focus its resources on what it views as potentially more significant projects: its Ninotsminda
horizontal program, the Manavi Oil discovery, the upcoming Norio MK72 Oligocene test, and its development and exploration projects in Kazakhstan where it has recently made new discoveries.
The N97H horizontal sidetrack well on the Ninotsminda
Field has been drilled to the top of the Middle Eocene reservoir at a depth of 2,562 metres (8,406 feet) where a 7" liner has been run.
The latest horizontal well on the Ninotsminda
Field, well N97H is currently drilling ahead in the build-up section at a depth of 2,538 metres (8,327 feet).
Immediately to the south and east of this acreage lie the Samgori, Patardzeuli and Ninotsminda
oil fields, together responsible for reported oil production of some 200 million barrels.
Field horizontal well N100H2 has been completed and is currently being tested.
On the Ninotsminda
Field the N100H2 well is now ready to commence the horizontal kick-out when the Baker-Hughes directional drilling equipment which is now in the country arrives on site later this week.
The horizontal development program on the Ninotsminda
field is re-starting with the N100H2 scheduled to commence drilling during September 2005.
The secondary Middle Eocene target zone (which is the main reservoir in the Ninotsminda
and Samgori Fields) which was encountered at 3,965 metres (13,009 feet) MD, was also significantly higher than in the M11 well, and with a much thicker section, also with hydrocarbons being indicated from drilling data and slim hole wireline logs.