Mediterranean Oil & Gas to update Ombrina Mare reserves after “encouraging” post-drill study results

Mediterranean Oil & Gas (AIM: MOG) said its key projects in Italy made progress and reached new milestones, expecting to update the certification of the oil reserves at Ombrina Mare in early 2010 and secure a production concession for the Guendalina gas field by year-end.

MOG aiming to wrap up the environmental approval process for Ombrina Mare by the third quarter of 2010 and secure the full production license by the end of that year after submitting the environmental impact assessment study to the Ministry of Environment. Results from the currently ongoing several key post-drilling studies have been encouraging and MOG currently plans to request a review and update of the independent certification of the field’s oil reserves and publish the full certification report in Q1 2010.

The current estimated capex (capital expenditure) for the Ombrina Mare field development plan (FDP), which includes a total of five wells, a plant designed for oil production of 10,000 bbls/d (barrels per day) and a 12 km (kilometre) submarine gas pipeline, stands at between €150 and €180 million.

The Ombrina Mare FDP has been designed by Proger SpA to produce the field's 20 MMbbls (million barrels) and 6.5 Bcf (billion cubic feet) of certified 2P oil and gas reserves. Production is scheduled to start in 2012 and is expected to peak at 5,000 to 7,500 bbls/d of oil and 3.5 mmcf/d (million cubic feet per day) of gas.

Meanwhile, at Guendalina, a production concession from the Italian Ministry of Economic Development for MOG’s 20% owned Guendalina gas field is now expected by year-end 2009 with field development activities expected to start as soon as January 2010. The drilling of two development wells is slated for H1 2011, with gas production and associated revenues expected to commence prior to the end of June 2011.

Based on the study completed by Italian oil and gas giant ENI SpA (NYSE: E), which owns an 80% working interest in the field, the aggregate gas production from the field is expected to be 22 mmcf/d. The field has independently certified gas reserves of 22 bcf (billion cubic feet).

“Guendalina and Ombrina Mare continue to produce excellent milestones that are propelling us towards our goal of becoming a medium sized oil and gas producer. In addition, the expected award by year-end 2009 of the Guendalina production concession allows the Company to consolidate the development timetable and the forecast start-up of field production,” said Chairman and Chief Executive of MOG Sergio Morandi.

MOG has also provided updates from its two other projects, the 22.89% owned S.S. Bernardo permit, where the company and its JV (joint venture) partners ENI and Total postponed the drilling schedule for the MG (Monte Grosso) 2 exploration well to 2011 due to the unavailability of the EMSCO 3 rig. Site maintenance works are now planned for 2010 to prepare it for a well spud in 2011.

The Monto Grosso prospect has an expected oil resource of 64 mmbbls (million barrels) net to the company and gross resources of 280 mmbbls.

The Anzano 1 production well inside the MOG operated and 40% owned S. Andrea Concession is expected to commence gas production by Q1 2010. Under the field development plan, gross gas production at Anzano 1 is targeted to increase to a peak of 7,000 - 8,000 scm/day (standard cubic metres per day) with 2,800 to 3,200 scm/d net to MOG.

The company is currently reviewing its existing exploration portfolio to identify exploration permits with high risk and limited resource potential. MOG intends to relinquish or release a total of eight exploration permits in Italy and Tunisia following the review.