Czech Operations
The Company has a group of seven original licences in northern Morava and a single Licence (the Salas Licence, described below) in southern Morava which was acquired in July 2007. The seven original licences are known as Bystrice-Hradek, Bystrice-Hradek-1, Smilovice, Oldrichovice, Jablunkov, Frydlant and Frydlant-Celadna.
All seven licences are readily accessible and close to oil and gas infrastructure including gas pipelines and trucking / rail facilities, which provide transport to nearby refineries. The proximity of existing infrastructure combined with the current increase in demand, particularly for gas, increases the possibility of commercial production from even relatively small fields.
Several leads have been identified in the licences. These are considered to be mainly gas prone with potential volume estimations in the “most likely” category ranging up to 18.7 billion cubic feet (bcf) gas and with a combined total of some 45.7bcf gas.
Previous Exploration
A dominant geological feature of the eastern Czech Republic is the Upper Silesian Coal Basin, which also extends into neighbouring Poland. Historically, coal was the primary energy source which powered heavy industry in the former Czech Republic.
During exploration to increase the established coal reserves, which involved mainly pattern drilling, several gas fields and a smaller number of oil fields were discovered. Initially most of these fields were not exploited commercially but the potential of this region to become a major source of hydrocarbons was more recently recognized and from the early 1980’s a systematic but low key programme of hydrocarbon exploration was begun. Valuable information from this period of exploration is still available and has been successfully used to identify the geological structures containing potential hydrocarbons described in the Independent Technical Expert’s Report. This exploration work included establishment of a regional seismic grid and the drilling of numerous stratigraphic wells. Re-evaluation of this existing exploration data is on-going
The seven licences have been grouped into five licence groups for exploration and description purposes.
Bystrice-Hradek Licences
The Hradek lead is a paleo-topographic high composed of limestone. The structure may cover an area of 8 square kilometres and is bounded by faults and depositional pinch-out of the limestone. This Devonian-Carboniferous carbonate complex has been shown to contain up to 10 zones of high fracture permeability over an interval of 500m between 1400m and 1900m depth; this major structure has the potential to contain up to 430 bcf of gas in place.
Smilovice/Oldrichovice Licences
The Smilovice structure is a block-faulted structural ridge comprising Devonian and Carboniferous units overlain locally by Neogene sandstone. The structure covers the whole of the Smilovice Licence and much of the Oldrichovice Licence. In this area the Devonian is predominantly limestone and dolomite whereas the Carboniferous is represented by a heterogeneous sequence of clastic sediments and terrigenous calcareous sediments.
Gas contained within the weathered and fractured carbonates and clastic sediments has been exploited over the last two decades elsewhere along the ridge. The first exploration well for gas on the ridge was drilled in the Smilovice Licence and successfully intersected gas-charged sediments. During completion of the well the gas-bearing formation was accidentally cemented and the well abandoned. Notwithstanding that other wells drilled along the ridge became gas producers the discovery well was not redrilled. The Company will consider twinning of the discovery well at an early stage in the future work programme. The Smilovice structure within the Company’s Licences could contain up to 590 bcf of gas.
Frydlant & Frydlant-Celadna Licences
The Frydlant lead extends from the Frydlant Licence west into the Frydlant-Celadna Licence. The lead is a four-way dip closure on Carboniferous Coal Measures. Almost vertically below this lead at greater depth is a similar but smaller structure on fractured and brecciated carbonates although the eastern part is effected by faulting and may have doubtful closure here. In the northern part of the Licence there is evidence of another structure on Carboniferous Coal Measures which will be further investigated.
Jablunkov Licence
This large licence is contiguous with Oldrichovice and Bystrice-Hradek-1 licences. Trending roughly down the centre of the licence from north to south is a deep trough known as the Jablunkovsky Graben. Preserved in the trough is a sequence where up to about 1000m of sediments is prospective for oil and gas. Outside the Jablunkovsky Graben, oil shows are recorded from two wells drilled close to the south-western boundary of the licence. On limited information available there is potential for significant oil production from the lightly explored southern part of the Jablunkov Licence.
The Salas Licence
The large Salas licence (150 sq km) is situated in the western portion of the hydrocarbon-rich Carpathian Foredeep in southern Moravia close to the Austrian border. This region has a history of oil and gas exploration and production.
Initial exploration of the Salas area was carried out by the former Czechoslovakian state-owned oil company (MND) as part of a wider programme of work in southern Moravia. Following privatization of the company in 1993 MND relinquished control of large areas of the country including Salas. No further exploration of the Salas area was undertaken until 2001 when Unigeo a s carried out a detailed study of previous exploration data including seismic and drilling data from adjacent areas. In total some 400 km of seismic lines were interpreted with the assistance of information from 13 wildcat wells drilled within the permit and from numerous wells drilled on adjacent ground. Most of the wildcat wells recorded inflows of gas or had inflow of formation water containing dissolved gas.
The Unigeo study has identified nine leads, four within crystalline basement highs, and five within barrier sands and talus deposits developed at the base of the favourable Karpatian sediments. Unigeo’s estimates of gas-in-place for the individual leads range from 1.8 bcf to 59.5 bcf; total potential lead volumes amount to 189 bcf of gas. GB Energy has yet to confirm these figures for potential gas-in-place.
