138
wells. Most of the production in the Al Nasr field is from the Upper Alif. The field accounts for most of the current
Block 5 production. The Dhahab field was discovered in May 1993, with first production in February 1997. The field
was developed with 19 producing wells and two gas injection wells. Gas expansion is the dominant mechanism driving
performance of the Dhahab field. The Halewah field was discovered in June 1992, with first production in September
1996. The field was developed with 17 producing wells and two gas injection wells. Gas expansion is the dominant
mechanism driving performance of the Halewah field.
The Group’s future exploration and development plans with respect to Block 5 are dependent on the government’s grant
of a licence extension, which is expected to be decided during the fourth quarter of 2014. If a licence extension is
granted, the Group expects to commence a drilling programme of approximately five wells per year going forward.
Block 43
Block 43 covers a gross area of approximately 932 km
2
and is located in the Masilah Basin in Yemen. The Group has a
28.33% revenue interest and a 33.33% cost interest in the Block 43 licence, held through a PSC entered into with the
Yemen Ministry of Oil and Mineral Resources. The Group’s JV partners are DNO International, which owns a 56.67%
interest and is the operator of the PSC and TYC, which owns a 15.00% interest in the PSC. The costs associated with
TYC’s working interest are carried pro rata by the other JV partners.
Following a commercial discovery in 2005, a development lease in Block 43 was granted over the area of the
commercial discovery, which covers 5% of the Block. The development lease is due to expire in April 2025, but the
Group has an extension option of an additional five years.
Block 43 currently has one producing field: Nabrajah. Production in the Nabrajah field comes from two separate
reservoirs: the Qishn reservoir and the Deep reservoir. The Nabrajah field produced 376 average boepd during the first
three months of 2014 on a working interest basis from eight producing wells, representing approximately 1.7% of the
Group’s average daily working interest oil production, which was a 41.7% decrease as compared to 645 average boepd
during the first three months of 2013, largely as a result of field shutdown in February 2014 due to an export oil pipeline
sabotage. Development work was suspended for security reasons.
The Nabrajah field was discovered in March 2004 with the Nab-1 well and began producing from the Qishn reservoir in
July 2005. The Qishn reservoir is now in the late stages of its productive life.
Subsequent wells targeting the Qishn reservoir produced mixed results. The Nab-5 well encountered a deeper reservoir
adding substantial gas and oil production to the field. Gas re-injection into the reservoir is also helping to lift oil
production. Reservoir data suggests a larger un-tapped hydrocarbon pool in that reservoir but an extended horizontal
well, Nab-10, failed to encounter hydrocarbons. The Group’s current activities are focused on delineating the extent of
the reservoir.
The Group is also in the process of replacing the diesel engines used in Block 43 operations with engines fuelled by
natural gas. To date, four of the six engines have been replaced. The completion of this project is expected to reduce
costs and extend the economic life of the Nabrajah field, allowing for further exploration and appraisal drilling in Block
43.
Exploration and appraisal assets
Block 49
Block 49 covers a gross area of 2,088 km
2
and is located in South Central Yemen. The Group holds a 64% revenue
interest and a 75.29% cost interest in the Block 49 licence, held through a PSC entered into with the Yemen Ministry of
Oil and Mineral Resources. A Group company is the operator of the Block and its JV partners are CCC, which owns a
21% interest and TYC, which holds a 15% interest. The costs associated with TYC’s working interest are carried pro rata
by the other JV partners.
To date, nine wells have been drilled in the Block and three oil and gas discoveries have been made; two wells produced
small amounts of light oil and one produced CO
2
rich gas and condensate. However none of the discoveries have yet
been shown to be commercial.
The Group’s current exploration and appraisal activities are focused on the hydrocarbon potential of the deeper basinal
part in the southern part of the Block and on trying to improve the understanding of the volcanic related CO
2
distribution.
Exploration, appraisal and development operations at Block 49 were temporarily put on hold in 2011 due to the security
situation in Yemen; but the Group resumed these operations in the fourth quarter of 2013. To fulfil its commitments
