BCE Beacon Energy Plc

29 January 2024

Beacon Energy plc

("Beacon Energy" or the "Company")

Erfelden Operational Update

Beacon Energy (AIM:BCE), the full-cycle oil and gas company with a portfolio of onshore German assets through its wholly-owned subsidiary, Rhein Petroleum GmbH ("Rhein Petroleum"), announces an operational update on the Schwarzbach-2(2.) ("SCHB-2(2.)") well in the Erfelden field.

SUMMARY

·    With the rod pump installed in late 2023, the SCHB-2(2.) well continues to clean-up although production remains at a rate of approximately 40 barrels of oil per day ("bopd").

·    As previously announced, the low production rate indicates that the reservoir near the wellbore has been invaded with drilling fluids which are restricting flow rates. This is not uncommon in situations where hole stability issues have occurred during drilling due to the use of high-density drilling fluids to stabilise the hole.

·    The Company has now commenced sand jetting operations with a coiled tubing unit to stimulate the well. Sand jetting will focus on the oil-bearing reservoirs in the Pechelbronner-Schichten ("PBS") sandstones.

·    Sand jetting technology uses a high-pressurised sand slurry with the objective of creating deep perforations beyond the zone invaded with drilling fluids. The expectation is that these deeper perforations will increase communication between the oil-bearing reservoir and the wellbore, and therefore increase production rates.

·    The sand jetting operation is expected to take 10 - 14 days, including the time required to re-install the rod pump and recommence production. Once the well is fully clean, which is anticipated to take several weeks, it is expected that the rod pump will be replaced with an Electrical Submersible Pump ("ESP") to maximise production - this is currently scheduled to take place in April 2024.

·    In addition, as part of the sand jetting operation, the Company will recover a downhole pressure memory gauge which will inform our understanding of both formation pressure in the oil-bearing reservoir and the restriction of flow around the wellbore caused by fluid invasion.

·    The Company is fully funded to undertake the sand jetting operation which has an estimated cost of less than €500,000.

The Company expects to provide a further update once a stabilised and sustained flowrate from the rod pump has been achieved.

Beacon Energy Chief Executive Officer, Larry Bottomley commented:

"While the SCHB-2(2.) well encountered excellent oil-bearing reservoirs with thickness and properties in excess of pre-drill prognosis, drilling fluids that invaded the reservoir near the well bore during operations are currently impeding production. The retrieval of the downhole pressure data will inform our understanding of the impact that the drilling fluid invasion has had on productivity.

"The Company has moved quickly to implement remedial actions required to improve the productive potential of the well. Sand jetting is a proven technology commonly used in the US which aims to provide deeper perforations than that achievable using the conventional perforation technique used on this well.

"We remain fully focused on establishing optimal production from the SCHB-2(2.) well as quickly as possible through the rod pump and ultimately the installation of the ESP.  Despite these operating challenges, the exceptional technical results of the SCHB-2(2.) well have materially increased the potential reserves of the Erfelden field and provided confidence on the productivity potential from this and future wells.

"We look forward to the results of this operation and providing an update on the work-over programme in due course."

END

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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.