OT26010 | Capital Allowances: Research and Development Allowances: 1967 Memorandum - Successive Stages of Work - Stages 3, 4 &5

Stage 3

Drilling of additional test holes, normally referred to as appraisal wells, to help determine whether the accumulation is large enough and suitable to commercial production.

The number of appraisal wells necessary for this purpose can vary considerably, at times as few as three might be sufficient, at others more than ten wells may be required. Some of the appraisal wells may be dry holes while other may be suitable for completion as producing wells. Either:

• In the event that commercial production is not established, abandonment of all wells, or

• In the event that commercial production is considered worthwhile, then commencement of Stage 4.

Stage 4

1. Drilling of development wells.

2. Installation and erection of production and storage facilities.

3. Installation of off-take facilities including pipelines, storage and pumping facilities, and tanker loading facilities.

Stage 5

Production operations.