(MENAFN - ProactiveInvestors - Australia) Zeta Petroleum (ASX: ZTA) has started a Feasibility Study on bringing two existing gas discovery wells at its Suceava Concession, Romania, into production this year and potentially adding US75,000 in monthly revenues.
Both wells had flowed at commercial rates during testing and the company and operator Raffles Energy are considering low cost options to develop them.
These include building a conventional pipeline from the wells to existing infrastructure as well as utilising gas-to-power technology.
"These two gas discovery wells on Suceava highlight the concession's prospectivity and represent a low cost route to materially increase our net revenues later this year," Zeta managing director Stephen West said.
Developing the SE-1 and Dornesti Sud-1 wells is an attractive proposition for Zeta as they have the potential to rapidly payback costs.
SE-1, drilled in 2005, tested at a stable rate of 25,500 cubic metres (900,000 cubic feet) per day while the 2007 Dornesti Sud-1 tested at 24,000 cubic metres of gas per day.
These could deliver additional net revenues of US75,000 per month to Zeta, adding to the revenues of US25,000 per month the company receives from existing production at the Climauti gas field, which produces 15,500 cubic metres of gas per day.
Cost of work is estimated at ‚2 million gross, or (‚1 million net to Zeta), for a conventional pipeline and facilities. This could be reduced if gas-to-power technology is used instead.
"We anticipate the two wells will recover their costs within 12 months, freeing up capital and generating revenues that can be reinvested elsewhere across our portfolio of assets," West said.
"This includes our previously producing 100% owned Bobocu licence and a 39% interest in the Jimbolia concession where NIS Gazprom Neft is currently drilling the Jimbolia-100 well into the Veche discovery, which has the potential to hold Pmean contingent resources of 1.72 million barrels of oil.
"2013 promises to be a highly active year for Zeta and I look forward to providing the market with updates on our progress in due course."
Zeta has a 50% interest in the 2,403 square kilometre Suceava Concession.
The concession is located on the Moldovian platform about 370 kilometres north of Bucharest and is contiguous to the Chevron owned Barlad concession.
It includes the Climauti gas field which is currently producing gas from Sarmatian sands located at a depth of about 460 metres.
Across the Suceava concession, Zeta believes there is the potential for up to 80 billion cubic feet of unrisked shallow conventional gas based on five leads and prospects identified at depths of between 400 metres and 1,000 metres.