The apparent gas-oil ratios for these tests were higher than expected due to the following: 1) DST 1 was conducted across the gas-oil contact and, consequently, the test was dominated by gas flowing from the gas cap and 2) DST 6 and 7 were interpreted to be pulling gas down fractures or other high permeability zones within the reservoir that are connected to the gas cap or through channels in the cement behind casing.
Based on reservoir data obtained from the Kurdamir testing program and independent engineering assessments, the Company predicts that sustainable production rates of 7,000 to 11,000 barrels of oil per day are possible for individual wells in the Oligocene reservoir utilizing horizontal drilling and completions technology. These sustainable production rates would follow higher initial flow rates. Horizontal wells will also minimize gas production from the oil leg where it underlies the gas cap.
Oil discovery confirmed in Eocene reservoir at Kurdamir-2. A single cased-hole test was performed over a net perforated interval of 108 metres and resulted in the flow of light, 45 degree API oil at sub-commercial flow rates. No formation water encountered.
Oil discovery confirmed in Cretaceous reservoir at Kurdamir-2. Three cased-hole tests were conducted over a 221 metres gross interval and resulted in the flow of light, 39 to 40 degree API oil at sub-commercial rates.
Spudded Kurdamir-3, an Oligocene appraisal well on February 22 on the giant oil discovery of the Kurdamir structure. Kurdamir-3 is targeting 150-250 million barrels of prospective oil resources. Currently drilling at depth of 1,926 metres with a planned total depth of 2800 metres.
Awarded contract for two 2,000 horse-power drilling rigs with a leading North American drilling contractor to drill the Hasira-1 and Baram-1 wells. Award was for a two year term with an option to extend for an additional two years and a provision for a third 2,000 horse-power rig if required.
Commenced 3D seismic survey in January, 2013 encompassing the Kurdamir structure and extending onto the neighbouring Topkhana Block; completion of the data acquisition phase anticipated early in the third quarter of 2013.
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