Gallic Energy Ltd. reports that it intends to change from its current snubbing unit to a drilling rig on its Ossun-2 well located in the Aquitaine Basin in Southern France.

The Ossun-2 well is a re-entry of an old Total SA wellbore previously drilled in the late 1960's. On January 10, 2012, the Company announced that it had spud the re-entry of Ossun-2. Operations to drill out the cement plug and to splice the 9 5/8 inch intermediate casing back to the surface were successful. However, at a depth of 1,344 meters, suspected and undocumented abandoned drilling pipe was encountered in the wellbore, making continuation of the re-entry process more uncertain from a cost and process perspective. Plans are now being developed for sidetracking Ossun-2 from near that depth. The re-entry was targeting multiple zones of interest between 1,775 meters and 3,000 meters. A sidetrack well will also allow Gallic to reach additional potential hydrocarbon bearing zones that could not be reached with the original cased-hole re-entry operations.

The snubbing unit rig currently on location will be released and negotiations are ongoing with rig contractors for services of a conventional drilling rig. Sidetrack operations are expected to commence in the near-term to capitalize on synergies from current re-entry operations. It is the Company's expectation that a drilling rig could be on-site within a few weeks. As originally scheduled, the re-entry of the Azereix-1 well will follow the Ossun-2 sidetrack and the multiple zone testing process, once completed. Funding of both well programs are within Gallic's budget and available cash on hand.

The Company continues to proceed on schedule for obtaining a new drilling license to drill the Hagolle-2 well on its Ledeuix permit targeting a shallow gas zone defined on 3D seismic. Gallic has a 100% ownership interest in all its French operations.

Mr. William H. Smith, President and CEO of Gallic, said "It is important to note that this obstruction is well above all of our zones of interest, and while this change of plans is a slight setback on timing of expected results, nothing has changed on either the size of the potential resources or on the geologic risk of those resources being producible in commercial rates. A sidetrack well will allow us to explore deeper zones where hydrocarbon potential has been identified, something that we were unable to do with the original cased hole re-entry operations. Additionally, the sidetrack will allow Gallic to obtain modern open-hole logs over the potential reservoirs, which will give more definitive reservoir information than could the old open-hole logs and the previously planned cased-hole logs."

Tags: Gallic Energy Ltd.