Kurdamir-3 Tests "Support Field Commerciality"

The earlier Kurdamir-1 exploration well discovered a significant volume of natural gas above an oil column in the Oligocene. Subsequently, the Kurdamir-2 appraisal well defined the oil column from -1,838 mSS down to a lowest known oil at -2,016 mSS. Now the Kurdamir-3 appraisal well tests, pressure data and log data have resulted in an interpreted oil-water contact to be at least-2,049 mSS.

DST #3 and DST #4 both flowed 37 degree API oil at rate of 633 barrels of oil per day ("bbl/d") and 885 bbl/d respectively. The gas-to-oil ratio was approximately 1,000 to 1,100 standard cubic feet per barrel, indicating that the oil leg is likely in connection with the gas cap on the crest of the structure.

The total fluid volumes flowed in each test contained approximately 55 percent water. Well log data and fluid composition supports that the water was a contaminant in the tests and was sourced from deeper than the tested intervals via channels in the cement behind well casing.

Flow rates were lower than expected due to the lower density of fractures encountered in the Oligocene reservoir at Kurdamir-3 in comparison with Kurdamir 1 and 2.

Expert analysis by a third party has concluded that due to problems with cement bond integrity there was water channeling upwards through the cement in the well bore annulus that connects DST intervals #3 and #4 to the deeper DST #2 interval. DST #2 straddled the oil-water contact and tested both oil and water.