Krásná Oil Field (75% reducing to 50% after payout)
The Krásná oil field was discovered and tested just prior to the end of the communist rule in what was then Czechoslovakia. Crude oil is contained within Devonian carbonates at a depth below the surface of about 1,600 metres. Two wells KS7 and KS8 are capable of production. Carpathian has an initial 75% interest in Krásná, which will reduce to 50% revenue interest in payback to the Company of capital costs.
The Krásná 7 and 8 wells recommenced production after the winter break in early May 2005 and initially produced approximately 60 barrels of oil per day. However, due to a series of problems in the second half of the 2005 calendar year the net result for 2005 was disappointing. Unfortunately these problems persisted in KS8 and economic production for the well could not be re-established in April 2006 after the winter break and the well was shut in and the pump relocated to the nearby KS4 location.
KS4 was drilled in 1985 and had produced hydrocarbons on test from time to time. The well was worked over in 2005 and based on the data acquired during 2005 it was decided to conduct a long-term test. This test commenced in June 2006 using temporary facilities and production for the month averaged 3.8 m3/day (24 barrels). It is planned to run the test to the end of the 2006 production season and then decide whether to install permanent facilities. The test oil will be sold at current market prices.
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