The first tests of explorative drilling codenamed “Zaláta-1” show that the hydrocarbon stock found in Zaláta will be of a substantial quantity, MOL reported yesterday. In September 2006 MOL and INA d.d. signed an agreement on a joint exploration in Hungary’s Zaláta and Croatia’s Podravska Slatina, near the Hungarian-Croatian border, as well as on a joint exploitation of the hydrocarbon reserve of the Dráva Valley. Drilling of the first well, Zaláta-1, was completed in December 2006 reaching the bottom at 3515 m depth. The layers now tested are between 3,100 m – 3,200 m. Two of the three stretches being supposed to contain natural gas have already produced gas. The deepest layer yielded 62,000 cubic meter per day and the middle one 337,000 cubic meter per day.
Our view: We see the news as neutral. The total possible production rate of 2.3th boe/d, however the exact date is still unknown. MOL set the target of 110 th boe/d until 2011, which we see as too high given the natural decline of Hungarian fields and slow development of fields in Russia.