GSPC poised to drill fifth well at Deen Dayal
After much indecision GSPC managing director JN Singh has put aside concerns about the company's crippling debt mountain and given the go ahead for a fifth well (D5) at Deen Dayal West at a cost of anything between $50-$75m.
This month (July) Singh was convinced to go ahead with drilling after examining impressive results from the fourth well D4 where by mid-July production stood at 11.9m cf/d (337,000 cm/d). GSPC expects production to rise to as much as 50m cf/d (1.4m cm/d) in the next three to four months.
Japanese consultant Xodus estimates D5 could eventually produce as much as 60m cf/d (17m cm/d), according to a GSPC source. "Let us hope the success of D4 is repeated at D5," adds our source.
"Not like the D3 well which collapsed!" If D5 is successful GSPC insiders expect Singh will give the go ahead to drill the sixth and seventh wells too. Some in GSPC's finance department worry that Singh must ensure there is enough cash flow to cover the estimated $50-$75m cost of each well.
"These are HP/HT wells in tight formations," adds our source. "They need a lot of money." GSPC will need anything from $200m to $250m to drill the fifth, sixth and seventh wells at shallow water offshore KG basin block KG-OSN-2001/3, add sources.
