Main Assets - Block 26 Syria Khurbet East/Yousefieh

Emerald is 50% owner of Block26 in Syria. The other half is held by Gulfsands Petroleum (AIM:GPX http://www.gulfsands.com/ ) who is also the operator.


Khurbet East


The main asset is the Khurbet East field, discovered in 2007 with the drilling of the KHE-1 discovery well.


This well flowed oil from the Kurrachine Dolomite (K-Dolly) formation and gave further encouraging results from the Massive and Butmah formations. The K-Dolly was flow tested at a rate of 478bopd. (http://www.emeraldenergy.com/Pr20070604.html). The test was done over a gross interval of ~100m, but the published logs from a Gulfsands presentation from October 2007 show a gross formation interval in excess of 250m (http://www.mediafire.com/?j1yezg52jvn Page 10). No further work has been done on Butmah and K-Dolly to date but it has been suggested that a commercialisation study for these formations is underway. It may be expected that significant reserves will result from future appraisal of these fomrations that are currently un-booked.


Appraisal and development effort has focused on the Massive formation where production is currently averaging ~10,500bopd and an expanded production facility is expected to lead to an increase in capacity to 18,00bfpd or ~16,000bopd (all EEN 50% WI) is expected to come on-line imminently. A Full-Field-Development facility is in the planning stages which may result in the field production capacity being lifted to 30-40,000bopd towards the end of 2010.


10 wells have been drilled to date, with KHE-11 underway.


The commercial terms of Block 26 are very attractive and have been best explained here: http://www.emeraldenergy.com/documents/20090126EENInvestorPresentation.pdf Slide 6).


59.2mmbo of 2P reserves have been booked for Khurbet East (63.4mmbo over the life of the field). EEN would have a 50% working interest in these reserves. However, since those reserves were published, KHE-8 - a delineation well has flowed oil and other new wells have performed better than expected, leading to a belief that the oil-in-place may increase as well as the recovery factor (http://www.emeraldenergy.com/PR20090430.htm).


Yousefieh

A new field, Yousefieh was discovered in November 2008 (http://www.emeraldenergy.com/PR20081119.htm). 11.3mmbo of 2P reserves have so far been booked against this field (EEN WI 50%). However a further contingent resource of 42mmbo oil-in-place has been allocated to the field pending further appraisal drilling and testing.