Romania Well Flow Test Operations Update

7 August 2020

Reabold Resources plc

("Reabold" or the "Company")

Romania Well Flow Test Operations Update

Reabold, the AIM investing company which focuses on investments in upstream oil and gas projects, provides an update on well flow test operations at the Iecea Mica-1 ("IMIC-1") well in Romania as part of the 2020 work programme (the "Work Programme").

The Work Programme is being carried out by Danube Petroleum Limited ("Danube"), which has a 100 per cent. interest in the Parta Sole Risk Area and will, on completion of the farmout to Tamaska Oil & Gas (see Reabold's announcement of 8 April 2019), have a 50 per cent. interest in the Parta Exploration Licence.

Reabold holds a 50.8 per cent. equity interest in Danube. ADX Energy Ltd ("ADX") is the operator of IMIC-1.

Highlights:

·      Services engaged including coiled tubing, nitrogen and testing services to acidise and flow test the IMIC-1 well. Programme start date expected within four weeks and expected to take nine days. The majority of the services are available in Romania thereby minimising potential delays due to COVID-19 related border restrictions.

·      Decision to proceed based on recently recovered down hole pressure measurements which confirm non-depleted reservoir pressure and gradual influx of reservoir fluids from down hole sampling which has recovered methane and drilling mud filtrate.

·      Programme objectives are to initiate flow by overcoming expected mud filtrate build up which has been interpreted as preventing strong flow from the well, determine reservoir fluid composition and the flow capacity of the PA IV reservoir.

·      Expected benefits of acidisation are the stimulation of the well in order to create flow paths for gas beyond the mud filter cake and drilling induced reservoir damage built up around the well bore while drilling and possible invasion into the reservoir. Acidisation is a very common practice for such reservoirs in Western Romania where over 20 per cent. of the reservoir is analysed from drilling cuttings to consist of calcite and siderite cement that can be dissolved by acid thereby enhancing near well bore permeability.

Stephen Williams, co-CEO of Reabold, commented:

"We are pleased to see the testing programme at IMIC-1 in Romania steadily approaching and we look forward to receiving the results of the flow test in due course. The testing programme will confirm the suitability of the gas composition for commercial sales and we continue to be encouraged by the potential resource upside across the licence, which will be further assessed later this year." 

Reabold notes that ADX has commenced contracting the necessary services to undertake acidisation and flow testing of the IMIC-1 well. The decision to commence acidisation and testing has been taken by ADX and Reabold on behalf of Danube based on the results of down hole pressure measurements and down hole fluid sampling data in conjunction with the data obtained during the drilling of the well, rock typing analysis using drilling cuttings as well as data from a nearby historical well.

Recently acquired down hole pressure data has confirmed pressure build up to initial reservoir pressure of approximately 210 bars (3046 Psi) in PA IV reservoir. Down hole sampling recovered methane gas and drilling fluids from the reservoir, which is a further indication of mud filtrate build up.

The objectives of the acidisation and testing programme are to initiate flow by overcoming expected mud filtrate build up which has been interpreted as preventing flow from the well, determine reservoir fluid composition and the flow capacity of the PA IV reservoir. As previously announced, the PA IV reservoir has porosities in the order of 20 per cent. based on petrophysical logs and good indications of permeability from rock typing work and is not interpreted to be a tight reservoir play per se.

Contracting of services and mobilisation of equipment is expected to take approximately four weeks and the programme duration is expected to be nine days. The approximate cost of the programme is €230,000 (including VAT and 10 per cent. contingency), which will be funded from Danube's existing cash resources.

Danube will contract and mobilise all the necessary acidisation equipment including a coiled tubing unit, nitrogen equipment and acid in Romania to stimulate and test the well. The injection of acid into the reservoir is intended to create flow paths for reservoir gas beyond the mud filter cake built up around the well bore while drilling. Acidisation is common practice for such reservoirs in Romania. Laboratory testing undertaken on behalf of Danube indicates that over 20 per cent. of the reservoir calcite and siderite cement can be dissolved by acid thereby enhancing near well bore permeability.

Ongoing operational updates in respect of Danube will be provided to shareholders over the coming weeks leading up to acidisation and testing operations.

ENDS

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Notes to Editors

Reabold Resources plc is an investing company investing in the exploration and production ("E&P") sector. The Company's investing policy is to acquire direct and indirect interests in exploration and producing projects and assets in the natural resources sector, and consideration is currently given to investment opportunities anywhere in the world.

As an investor in upstream oil & gas projects, Reabold aims to create value from each project by investing in undervalued, low-risk, near-term upstream oil & gas projects and by identifying a clear exit plan prior to investment.

Reabold's long term strategy is to re-invest capital made through its investments into larger projects in order to grow the Company. Reabold aims to gain exposure to assets with limited downside and high potential upside, capitalising on the value created between the entry stage and exit point of its projects. The Company invests in projects that have limited correlation to the oil price.

Reabold has a highly-experienced management team, who possess the necessary background, knowledge and contacts to carry out the Company's strategy.