Oil & Gas Operations

Brazil is one of the few countries in the world with attractive fiscal terms, a strong independent regulator and excellent prospectivity.  The prospectivity in particular has been demonstrated by Eromanga's first two projects.  Both were completed as future producers with total reserves and resources of around 140 mmBbl of oil in place  (mid case, 100% basis).

Eromanga is working in a low cost environment.  Capital costs are low because the fields are on shore and typically in flat dry country with good road access.  Reservoirs are at shallow depths by industry standards and oil recovery is by conventional drilling and pumping operations.  Because Eromanga is focused on basins with existing production, oil and gas infrastructure is available and there is good access to international and local service companies.   

Brazil program complimented by On-shore USA program

In 2010, Eromanga developed a strategy to build production by partnering in Horizontal Drilling opportunities in Continental USA.  These opportunities are not only expected to add reserves and production to Eromanga's portfolio, but will also build the Company's capability in the latest horizontal drilling and fraccing technology.  This technology is rapidly changing the economics of on-shore field development.  Eromanga believes it has important application in that sector in Brazil.

The Klick Drilling Program

On 26 July 2010, Eromanga executed a binding agreement to acquire a 49.2% Working Interest in Klick East. The transaction also included an option for Eromanga to acquire a similar interest in Klick West under the same terms.

Klick 1-22H is the first of 2 wells that are permitted for the Klick Section with a further well planned for Klick West, should Eromanga take-up its option to participate in that Block by July 2011.

Recent nearby horizontal drilling activity by both Chesapeake and Sandridge Energy Inc. has been successful, especially in combination with “slickwater fracturing” technology. Both Sandridge and Chesapeake has demonstrated that horizontal drilling of the Mississippian reservoir delivers greatly enhanced initial production rates of oil and gas and significantly increases oil and gas recoveries.

In addition to exploiting the Mississippian with horizontal drilling, secondary oil and gas resources are known to exist in the Hunton, Viola and Simpson geological intervals. These zones, if found to be productive, could yield additional oil reserves in Klick East and Klick West.

Horizontal drilling rigs, service companies and oil and gas production infrastructure are abundant in the Woods County resulting in low production costs. Crude oil may be readily trucked from surface tanks by numerous competitive purchasers.

About CMX

CMX was founded in 1987 and is a private energy company with offices in Kansas and Colorado.  The company is actively engaged in drilling and development of natural gas and oil prospects in the continental United States, with a primary focus in the Mid-Continent regions including Kansas and Oklahoma.

CMX is managed by a team of professionals with many decades of experience generating and developing oil and gas prospects on-shore USA.  Throughout its existence, CMX claims a success ratio of over 80%, across exploration and development drilling.  CMX maintains extensive digital well and well log databases and operates highly developed geological, engineering and geophysical evaluation programs. CMX has demonstrated effective project management of its drilling programs and successful cost control systems.

The Brazilian Analogue

Eromanga believes that the production characteristics of the Mississippian cherty carbonate reservoir in Klick East and Klick West can be considered to be analogous to the reservoirs encountered in Eromanga’s Tatu discovery in the Guara field and the Paca discovery in the Harpia field in Brazil’s onshore Sergipe-Alagoas Basin.