Swara Tika Discovery Declared Commercial

HKN Energy Ltd. (HKN) has announced that it has notified the Kurdistan Regional Government of Iraq (KRG) that the Swara Tika discovery is a “Commercial Discovery” pursuant to the terms of the Sarsang Production Sharing Contract.

HKN, as operator of the Sarsang Block, has drilled two wells on the Swara Tika structure. The Swara Tika-1 exploration well was spudded in August 2010 and drilled to a total depth of approximately 3,800 meters. Daily flow rates were established from two Triassic tests estimated at more than 7,000 barrels per day (bpd) of 35°-39° API oil with associated gas.

The Swara Tika-2 well was spudded in December 2011 and drilled to a total depth of approximately 3,700 meters. The Swara Tika-2 well established natural flow from five Triassic zones totaling more than 18,000 bpd of 35°-39° API oil and 14 million standard cubic feet (mmscf) of associated gas on a 2” choke with only a portion of each interval perforated.

In addition, during the drilling of Swara Tika-2, HKN successfully recovered significant quantities of heavier Jurassic oil to the surface using underbalanced drilling techniques. The Swara Tika-2 well is located 4 kilometers away from the Swara Tika-1 discovery well and the hydrocarbon bearing zones of interest are 150 meters downdip from the Swara Tika-1 well. Both wells have approximately 1,800 meter gross stratigraphic sections with indications of hydrocarbons.

“We are pleased to declare a commercial discovery relating to the Swara Tika structure, which is an important milestone as we move toward the full development of this discovery,” said Russell Freeman, Chief Executive Officer, HKN Energy. “We continue to appraise the other structures on the Sarsang Block as permitted by the KRG, and we look forward to working with our co-venturers and the KRG to further develop this world class block.”

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