NORWAY DNO TESTS YEMEN YAALEN-3 WELL

NORWAY, May 11 (Saba)- Norway’s DNO has reported its optimism after testing the Yaaln-3 well onshore Yemen, as it flowed 1,400 b/d of oil with no water from the lower of two intervals, economic media reported on Tuesday.

The test flow was restricted by the equipment used, making the company think that production flows of some 4,000–5,000 b/d could be possible from the two reservoir layers intercepted in the well, and the lower interval proved much thicker than initially thought.

DNO drilled Yaalen-3 to a depth of 1,898 metres, hitting a total combined net pay of about 20 metres. The company is now about to test the upper of the two pay zones which it expects to have similar characteristics to the lower interval.

Yaalen-3 was an appraisal well drilled as part of DNO's work programme leading to the development of the Yaalen and Sharnah oil discoveries on Block 47, which it has previously assessed as holding potential gross recoverable reserves of 10 million barrels.

This number could now potentially be revised upwards, as DNO said it plans to launch a fast-track development of the Yaalen discovery.

Yemen needs all the positive exploration news it can get, if it is to attract investors into its increasingly mature and rapidly declining oil play.

There are indeed still opportunities for IOCs to pursue, although most of them are of a small scale and only suitable for juniors and minnows.

Even Yemen's young gas sector is seen as of limited further growth potential, although the recently inaugurated Total-led Yemen LNG project will continue to earn the country significant income and cushion the fall in oil revenue somewhat over the coming decades.