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Oil Find Declared Commercial, Shares Fall

Oil Find Declared Commercial, Shares Fall

Shares in WesternZagros Resources fell 12 percent on Thursday following the announcement that it has completed a revised resources assessment of its Kurdamir Oligocene reservoir in the Kurdistan Region of Iraq and there are no material changes.

On the Garmian Block, declaration of commerciality has been filed, the Baram-1 exploration well has discovered light oil, albeit in low permeability reservoir, and the Hasira-1 well has thus far confirmed the extension of the Sarqala oil discovery in the Jeribe reservoir.

Operational updates on the Kurdamir and Garmian Blocks include:

  • Independently audited revised assessments of gross unrisked mean contingent and prospective resources for the Oligocene reservoir in the Kurdamir Block are materially unchanged following the Kurdamir-3 well results.
  • The Company has filed a declaration of commerciality of the Sarqala Discovery and is advancing development plans with the Kurdistan Regional Government.
  • The Baram-1 well discovered a gross interval of 73 metres of light oil in the Oligocene reservoir and this indicates a gross hydrocarbon column in excess of 500 metres if it extends to the crest of the Baram structure. The well will be suspended pending further evaluation.
  • The Hasira-1 well confirmed light oil in the Jeribe reservoir and the well is preparing to drill ahead into the deeper Oligocene reservoir.
  • A 30 day extended well test in the Kurdamir-2 well is scheduled for March to better assess the Oligocene reservoir performance.
  • A workover of the Sarqala-1 well is scheduled for March to increase the production capability above the current capacity of 5,000 barrels of oil per day.

Posted in Oil & Gas4 Comments

List of Oil Companies in Kurdistan

List of Oil Companies in Kurdistan

Erbil Governorate has compiled and published a list of the top oil companies in Kurdistan [Note: This list was originally compiled and published by Marcopolis - Ed.].

Listing them by country:

USA

  • Exxon Mobil
  • Chevron
  • Aspect Energy
  • Marathon Oil Corporation
  • Hillwood International Energy
  • Hunt Oil
  • Prime Oil
  • Murphy Oil
  • Hess Corporation
  • HKN Energy
  • Viking International

Canada

  • Forbes and Manhattan
  • Western Zagros Resources
  • Talisman Energy Inc
  • NIKO Resources
  • Ground Star
  • Shamaran

Posted in Oil & Gas4 Comments

WesternZagros Completes Successful Oil Test at Kurdamir-2

WesternZagros Completes Successful Oil Test at Kurdamir-2

By John Lee.

WesternZagros Resources has announced that it and the operator, Talisman, are preparing to complete the Kurdamir-2 well after successfully finishing an additional cased-hole test in the Oligocene Formation (DST#7).

The test was conducted over a 24 metres thick interval between depths of 2,528 metres and 2,552 metres. It achieved a stabilized flow rate of 2,184 barrels per day (“bbl/d”) of light, 42 degree API oil, together with 10.4 million cubic feet per day (“mmcf/d”) of natural gas.

The gas to oil ratio likely indicates a partial contribution from the gas cap due to free gas drawdown through natural fractures in the reservoir. The 3.5 inch tubing size used to conduct this test, together with the unanticipated gas contribution from the gas cap, restricted the oil flow from the reservoir.

As a result, the Operator and WesternZagros have agreed that further tests of shallower zones in the Oligocene reservoir are unnecessary and are now working together on plans to realize the maximum oil production potential from the Oligocene reservoir in Kurdamir-2, potentially through an extended well test subject to the approval of the Kurdistan Regional Government.

Simon Hatfield (pictured), WesternZagros’s Chief Executive Officer commented:

This second cased hole test in the Oligocene further reinforces our view that Kurdamir is a giant discovery. The results of the entire Oligocene testing program have exceeded our expectations for both thickness of oil column and reservoir quality.

“It is apparent that the intervals tested have excellent permeability and, with optimally designed well completions to isolate the gas cap, are expected to yield oil production rates far in excess of the currently constrained rates.

“The results continue to support our belief that the Oligocene has the potential to hold over a billion barrels of recoverable oil. We are excited about our next appraisal well in the Kurdamir structure at Kurdamir-3. Kurdamir-3 will spud as soon as possible in the new year.

This most recent cased-hole test was conducted over a perforated interval of 24 metres thick in fractured carbonates in the main porous zone of the Oligocene reservoir. The flow rates of 2,184 bbl/d of light oil and 10.4 mmcf/d of natural gas were recorded after flowing and stabilizing the well for three days at progressively larger choke sizes.

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Heritage Oil Reserve Update

Heritage Oil Reserve Update

By John Lee.

Heritage Oil, an independent upstream exploration and production company, has announced the publication of an independent Competent Person’s Report (“CPR”) compiled by industry specialists RPS Energy Consultants Limited (“RPS”).

Trading in the company’s shares remain suspended pending an acquisition.

On 29June 2012, Heritage announced the proposed acquisition of a major interest in Oil Mining Lease 30 in Nigeria (“OML 30″) and this CPR has been commissioned to provide independent reserve and resource information and a valuation of OML 30, together with an update on certain existing assets in Heritage’s portfolio.

The range of reserves and resources is as at 31 March 2012 and is based on the data and information available up until that date. The CPR assumes that the acquisition of OML 30 completes on 1 September 2012. All volumes are stated net of royalties unless otherwise stated.

Highlights:

· OML 30, Nigeria;

  • Gross Proved plus Probable reserves(1): 1,114 million barrels, 58% higher than management estimates as set out in the announcement issued by the Company on 29 June 2012
  • Proved plus Probable net entitlement reserves to Heritage: 396 million barrels of oil
  • Economic valuation of Proved plus Probable reserves estimated at between US$3,089 million and US$3,789 million, depending on the income tax scenario (post-tax, net Heritage share, assuming a 10% discount rate)

· Zapadno Chumpasskoye Field, Russia;

  • Proved plus Probable net entitlement reserves to Heritage: 65 million barrels of oil
  • Economic valuation of Proved plus Probable reserves estimated at $336 million (post-tax, net Heritage share, assuming a 10% discount rate)

· Miran Field, Kurdistan Region of Iraq (“Kurdistan”);

  • Contingent Resources – mean estimate of Heritage working interest of 56.25%, gross of royalty: 366 million barrels of oil equivalent, comprising 53 million barrels of oil and condensate and 1,815 billion cubic feet of gas, resulting in a mean net entitlement volume to Heritage of 136 million barrels of oil equivalent
  • 2C estimate of net entitlement to Heritage of Contingent Resources: 130 million barrels of oil equivalent, comprising 15 million barrels of oil and condensate and 669 billion cubic feet of gas based on Heritage interest of 56.25%
  • Prospective Resources – mean(2) un-risked estimate of working interest of 56.25% to Heritage, gross of royalty: 142 million barrels of oil equivalent, comprising 96 million barrels of oil, 256 billion cubic feet of gas and condensate of 3.1 million barrels

(1) Full field (100% basis) gross of royalty

(2) The mean is a statistical aggregate which assumes that each of the three prospects is successful. The probability of this occurring is 3% for the oil and 12% for the non-associated gas and condensate.

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WesternZagros’s Kurdamir-2 Well More than Doubles Oil Resource Potential

WesternZagros’s Kurdamir-2 Well More than Doubles Oil Resource Potential

WesternZagros Resources today announced an update of the Company’s ongoing exploration and appraisal program, and a substantially revised Prospective Resource Assessment of the Eocene reservoir for Kurdamir.

The Eocene reservoir is the second of the three targeted reservoirs in the Kurdamir-2 well (currently drilling). The revised assessment is based upon the Kurdamir-2 well encountering an interpreted oil bearing, fractured Eocene reservoir section with a gross thickness of 275 metres.

The revised resource estimate is confirmed in an independent audit carried out by Sproule International Limited (“Sproule”).

Headlines:

  • The Company reported a substantial increase in the mean estimate of gross unrisked prospective resources (“Mean Prospective Resources”) in the Eocene reservoir at Kurdamir. The revised Mean Prospective Resource is now 278 MMbbl of oil as of June 1, 2012 compared to 124 MMbbl reported previously.
  • The Kurdamir-2 well is currently drilling ahead at 3,427 metres. The 9-5/8 inch casing was cemented successfully at 3,140 metres. Wireline logs were successfully run across the Eocene interval for the first time, as this was not possible in the Kurdamir-1 well. The analysis of the wireline logs has resulted in the Company substantially increasing its Eocene prospective resource assessment.
  • After eight months on extended well test, Sarqala-1 has produced approximately one million barrels (“MMbbl”) of light oil.

Simon Hatfield (pictured), WesternZagros’s Chief Executive Officer, commented:

The petroleum potential of our exploration blocks, which has always been highly promising, continues to exceed our expectations particularly at Kurdamir. Doubling our resource estimates in the Eocene reservoir, after tripling our estimates in the first reservoir target, the Oligocene, bodes well for the potential in the third reservoir target in the Cretaceous still ahead of us.

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WesternZagros Discovers “Giant Oil Field” at Kurdamir-2

WesternZagros Discovers “Giant Oil Field” at Kurdamir-2

WesternZagros Resources has announced that the mean estimate of gross unrisked contingent resources (“Mean Contingent Resources”) has increased to 147 million barrels of recoverable oil (corresponding to 464 million barrels of mean estimated gross discovered oil initially in place) and the mean estimate of gross unrisked prospective resources (“Mean Prospective Resources”) has increased to 1.2 billion barrels of recoverable oil (corresponding to 3.6 billion barrels of mean estimated gross undiscovered oil initially in place) for the Oligocene reservoir in the Kurdamir Block.

These results follow the major oil discovery at the Kurdamir-2 exploration well in the Kurdistan Region of Iraq. The significant increase in both Mean Contingent and Prospective Resources is due to the fact that Kurdamir-2 encountered a 118 meter light oil column with no indications of a water leg at the Kurdamir-2 location, proving that the oil leg in the Oligocene reservoir on the flank of the Kurdamir structure is involved in a much larger trap than was previously interpreted. The updated resource estimates are confirmed in an independent audit carried out by Sproule International.

We are delighted with these results as we have found what this company was created to find, and the reason we entered Kurdistan. The Kurdamir structure is proving to be one of the top oil discoveries of the decade and this is a company maker for us,” said Simon Hatfield (pictured), WesternZagros’s Chief Executive Officer.

The oil reservoir of the Kurdamir structure extends further than the area previously assessed and we have not yet found its limits. In addition there is still more news to come on this well as we drill deeper into the Eocene and Cretaceous reservoirs and conduct further testing of the Oligocene oil leg in the coming months.

Contingent Resources

The Company reports an increase of approximately 400 percent of the Mean Contingent Resources in the Oligocene reservoir in the Kurdamir Block to 147 million barrels of oil (“MMbbl”). When gas and condensate are included the Mean Contingent Resources equal 384 million barrels of oil equivalent (“MMBOE”), as shown in Table 1(a) below. For completeness, the corresponding petroleum initially-in-place estimates are also included in Table 1(b) below.

Prospective Resources

The Company also reports an increase of approximately 300 percent in the Mean Prospective Resources for the Oligocene reservoir in the Kurdamir Block to 1.2 billion barrels of oil (“Bbbl”), or 1.4 billion barrels of oil equivalent (“billion BOE”) when gas and condensate are included, as shown in Table 1(c) below. For completeness, the corresponding petroleum initially-in-place estimates are also included in Table 1(d) below.

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Afren Jumps on Kurdistan Oil Find

Afren Jumps on Kurdistan Oil Find

Shares in Afren jumped more than 10% in early trading, before falling back slightly, following the company’s announcement that the high impact Simrit-2 exploration well, located on the Ain Sifni PSC in the Kurdistan region of Iraq, has discovered a significant oil accumulation based on the results of drilling, wireline logs and sidewall core sampling.

The objective of the Simrit-2 exploration well is to test the western extent of the Simrit anticline. The well has reached the prognosed total measured depth of 3,700 m (3,697 m true vertical depth). Preliminary analysis of data collected during and following drilling indicates that the well has encountered an estimated 409 m of net oil pay in Cretaceous, Jurassic and Triassic age reservoirs (an estimated 312 m of this pay is interpreted as containing light oil). No oil water contact has been established in the target reservoirs.

As there are continuing strong hydrocarbon shows to the current depth of 3700 m, Afren and operator Hunt Oil Middle East plan to run casing at the current depth and continue drilling to a new total depth of circa 3,800 m to test additional zones of prospectivity.

Once drilling operations have concluded a comprehensive well testing programme will be undertaken across multiple reservoir intervals, after which the drilling rig will be mobilised to the East Simrit prospect to drill the Simrit-3 exploration well. Afren has a 20 per cent. interest in the Ain Sifni PSC and is partnered by Hunt Oil Middle East (60 per cent. and operator) and the Kurdistan Regional Government (20 per cent.).

Osman Shahenshah, Chief Executive of Afren, commented:

The successful result of the Simrit-2 exploration well represents a second major exploration success for Afren in 2012, following on from the Okoro East discovery offshore south east Nigeria. The scale of the oil column that has been intersected suggests that the Simrit structure and surrounding prospects elsewhere on the Ain Sifni PSC have the potential to be transformational for Afren“.

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Hunt Oil Signed KRG Deal ‘Despite US Warning’

Hunt Oil Signed KRG Deal ‘Despite US Warning’

Hunt Oil Co. was warned before it signed a contract with the Kurdish government in Iraq that it might not be dealing in Kurdish territory, UPI reports.

The Dallas-based energy company signed a production-sharing contract (PSC) with the Kurdistan Regional Government (KRG) in 2007. It was warned by the U.S. Embassy in Baghdad that the area outlined in the licence contract might not be officially recognized as being inside Kurdish territory.

The communication, published by internet watchdog WikiLeaks, quotes the embassy as warning there was “legally ambiguity” surrounding the deal because it fell within an area classified as a disputed territory.

Arabs, Kurds and ethnic minority groups sprinkled throughout Iraq’s north are squabbling over access to oil, autonomy in the disputed territories and a swath of land stretching from Sinjar in the northwest to Khanaqin in the north of Diyala province.

Hunt Oil landed the deal shortly after the KRG passed a regional oil law. Its owner, Ray Hunt, sat on the U.S. foreign intelligence advisory board when the deal was signed, the Platts news service notes.

The cables reveal, however, that Washington “discouraged” companies from doing business with the KRG until a national hydrocarbon law passed.

The KRG signed dozens of production-sharing contracts without the national law, however.

(Sources: UPI, Platts)

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