(MENAFN- ProactiveInvestors - Australia) Zeta Petroleum (ASX: ZTA) is proceeding with test of its Jimbolia-100 appraisal well in Romania after intersecting hydrocarbons in multiple sands consistent with those in two previous discovery wells in the Jimbolia Concession.
Operator NIS Gazprom Neft, which is majority owned by Russian gas giant Gazprom, will move the current drilling rig and replace it with a lighter workover rig for the testing phase.
This will allow a complete and extensive testing program, which will be fully funded by NIS Gazprom Neft.
Jimbolia-100 was drilled to a total depth of 2,590 metres and logged with wireline tools and seven inch liner run and cemented into the bottom section of the hole.
The well targeted the Jimbolia Veche oil discovery which has two hydrocarbon bearing intervals and a current Pmean Contingent Resource of 1.72 million barrels of oil.
If successful, Jimbolia-100 will be completed as a production well.
Jimbolia
Previous drilling at Jimbolia by Petrom in 1983 identified the Pliocene VIII as an oil reservoir with a gas cap.
This was penetrated by the Jimbolia-1 well flowing oil at rates of up to 120 barrels per day while Jimbolia-6 also intersected an oil leg and tested oil at 36bpd.
Jimbolia has also produced gas from the Pliocene III interval that was brought on stream from 1985 to 1998. About 2.9 billion cubic feet of gas was produced during this time.
This interval showed a spike in drilling gas during the last well penetration in 2010 suggesting that there may be some remaining reserves, or that some limited recharge may have taken place.
Further potential could exist in the Jimbolia Vest discovery which was tested, but not produced, over two intervals of the Lower Pliocene IV reservoir.
Zeta acquired the Jimbolia concession in 2007 and has collated all existing well data and 2D seismic data on the field.
This has allowed it to complete a geological model and identify drill targets.
It then farmed out a 51% operating stake to NIS Gazprom Neft, the biggest one of the biggest vertically integrated oil companies in South East Europe, operating 53 oil and gas fields in Serbia.
Zeta retains a 39% stake in Jimbolia while the remaining 10% is held by local company Armax Gaz.
Romania
Romania has a long history of oil and gas production dating back to the mid 1800's and was the second largest European producer in 1937.
While progress and development was slowed during Communist rule from 1947 until the Romanian revolution in 1989, the country still holds major oil and gas reserves, an extensive network of oil and gas pipelines as well as surplus refining capacity.
Since 1990, Romania has been undergoing the transition to a free market and has excellent fiscal terms with deregulation expected this year.
Major players have carved out acreage for themselves with ExxonMobil (NYSE: XOM) targeting offshore petroleum in the Black Sea and Chevron (NYSE: CVX) set to restart shale gas drilling.
Analysis
While results are still forthcoming from Jimbolia-100, operator NIS Gazprom Neft's decision to go ahead with a complete and extensive suite of testing indicates the Serbian major expects the well to flow oil.
Establishing oil flow will result in further cash flow for Zeta and open up the Jimbolia Concession for further development.
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