"Testing has proved gas is present at good production rates, but... it is premature to quantify the amount of proved and probable natural gas reserves," GeoGlobal, a US publicly traded oil and gas company, said in its filing to bourses.
GeoGlobal holds 10 per cent stake in shallow water Krishna Godavari basin block KG-OSN-2001/3 where according to Modi more than 20 trillion cubic feet of gas reserves has been struck.
The Gujarat government owned Gujarat State Petroleum Corporation is the operator of the block with 80 per cent stake.
"Additional testing and technical evaluation must be completed, and more exploratory wells must be drilled in order to establish the extent of the field and to estimate the natural gas reserves discovered," GeoGlobal said.
V K Sibal, director general, directorate of hydrocarbons, government of India's nodal agency for upstream oil and gas exploration, too had opined that estimation of reserves based on just one well was premature.
GeoGlobal said its interpretation of 3D seismic indicates that the KG#8 (the well that struck upon gas and thereafter named Deen Dayal) may cover a 100 sq km area.
GSPC's partner downplays gas find
"Further exploratory drilling over the coming months at about 4 km step outs to the east of the KG#8 well is intended to delineate the extent of the structure." GSPC stated that commercial production is expected to commence before the end of 2007.
KG-8 is the third in a 14-well drilling programme on the block. The first two wells were dry.
GeoGlobal said GSPC successfully completed initial testing of 10 metres of perforations across an interval from 4747.5 to 4777 metres at a stabilised flow rate in excess of 10 million cubic feet per day of gas at a wellhead flowing pressure of 4,500 psi.
Modi had however claimed the gas pressure was 14,000 psi. GSPC intends to continue testing from 4747.5 to 4993 metres prior to moving uphole to test intervals from 4205 to 4700 metres.
Saipem's jack-up rig Perro Negro 3 is on long-term contract for drilling in the block, although GSPC is seeking additional high temperature - high pressure drilling rigs.
The KG-8 well was drilled to a depth of 5061 metres, which is the deepest well drilled offshore to date in this basin. GSPC has an 80 per cent stake in the block with Jubilant Enpro and GeoGlobal Resources has 10 per cent.