New partnership cooperation: A joint project is to be launched by MOL and PetroHungaria for enhancing production from Bajcsa gas field

MOL Hungarian Oil and Gas Plc and PetroHungaria Ltd. have signed a Joint Operation Agreement (JOA) for the development of the Bajcsa gas field to enhance production of the field. The goal of this cooperation is to produce the gas reserves that so far have not been reached by the existing wells. This will be achieved by drilling deviated horizontal sections in the wells.

Over the past few months the partners have enhanced the geological and field development concept for the field and this will be the basis for the horizontal sections using pre-existing wells. The horizontal drilling in the first two wells will most likely begin at the end of the year. Bajcsa is an existing field with current baseline production, so the expected approximate additional production of nearly 80.000 m³/day can be immediately sent to market without implementing any specific field development projects.

The Bajcsa field is located 6 km south of Nagykanizsa and production started in 1961 with 20 gas wells. The reservoir has seven layers, two of which contain the majority of the total reserves. The total cumulative gas volume produced from Bajcsa to date is approximately 470 million m³ (16,6 bcf). The partners plan to produce significant additional quantities of gas from the targeted layers by drilling horizontal sections from wells specifically selected for this purpose.

MOL will not require any project financing and the baseline production will continue to be owned by MOL through the entire project. The partners will share the additional gas quantities produced as a result of the horizontal drilling. MOL will continue as operator of the field during and following implementation of the project.

The partner, PetroHungaria ltd, is a 90% subsidiary of Ascent Resources Plc. (Ascent), a London-based company. Ascent has a portfolio covering 6 countries and 20 oil and gas projects. The company is engaged in hydrocarbon exploration and/or production, in Hungary, Italy, Switzerland, Spain, Slovenia and the Netherlands.

Geological risk sharing and cross fertilisation of ideas and experiences of partner companies is a traditional characteristic of MOL’s international hydrocarbon exploration and production operations. We hope that the Bajcsa project will show the benefits of inter-company cooperation and partnership in our domestic operations also.