Calvalley has established a strong base of cash flow and earnings from its exploration success in Block 9.
Increases in proved developed producing reserves has established a foundation of strong cash flow providing a basis to fund future development and exploration activities without the need for debt financing or equity dilution.
The sustained production operations at Hiswah, Ras Nowmah and Al Roidhat in 2012, resulted in the highest annual average production volumes since 2007, which in turn generated record annual earnings and funds flow per share in 2012.
Safety and security concerns delayed the start up of drilling until June 2012. The company completed the drilling of three wells in 2012, comprising two oil wells at Ras Nowmah and a water injection well at Hiswah.
Resolution of local issues during 2012 resulted in the Al Roidhat field being put on production on a sustainable basis.
The Al Roidhat field produces heavy oil (15 degree API). In conjunction with the building of the TOF the Company finalized agreements enabling it to upgrade the heavy oil from Al Roidhat through blending with its other crude oil streams and receive a price for the blend at a price, equivalent to the traditional 26? API Masila Blend.
The company's 2013 plans include: i) develope and install several facility related projects to handle increases in produced water volumes which will enable production to be optimized, and ii) drill various prospects on the plateau which show similar characteristics to the Ras Nowmah field.