Operational Update
In the Kurdamir-2 well, after an intermediate casing was set in the Aaliji seal at 3,140 metres, drilling continues at the current depth of 3,427 metres, with the approximate total depth anticipated to be 4,072 metres. Under the Kurdamir Production Sharing Contract ("PSC") commitments, the Kurdamir-2 well is required to be drilled by June 30, 2012 which will then be followed by a testing program of indicated pay intervals of the Cretaceous reservoir. In addition, the Company is working with the operator, Talisman (Block K44) B.V. ("Talisman") to examine options for cased hole testing of the 118 metres of gross oil pay in the Oligocene and the 275 metres of gross oil pay in the Eocene. The co-venturers are also planning a 3D seismic program over the Kurdamir structure and a further appraisal well (Kurdamir-3) to assess the ultimate size of the Oligocene and Eocene reservoirs.
After eight months on extended well test, the Jeribe and Upper Dhiban Formations in Sarqala-1 have produced approximately one million barrels ("MMbbl") of light oil. The Company is in discussions with the Ministry of Natural Resources of the Kurdistan Regional Government with respect to a declaration of commerciality and the submission of a development plan for Sarqala.
A planned wireline program commenced on May 28, 2012 to remove the pressure gauges in the well and prepare the well for continued production. During the attempted removal of the gauges, the subsurface valve malfunctioned. The Company is currently securing specialized equipment to remediate the issue. It is anticipated that this intervention could take a minimum of one month to complete.
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