By John Lee.
In its interim results on Wednesday, Petroceltic gave an update on its operations in Iraqi Kurdistan.
The company, along with Hess (as operator) has been active in the Kurdistan Region since 2011 when the Shakrok and Dinarta blocks were awarded with Petroceltic holding a 16% interest in each. Activity for the first half of 2014 consisted of the drilling of two exploration wells.
Shakrok-1, drilled on the Shakrok block, was spudded on the 30th August 2013 and reached its total depth of 3,538 meters on 30 March 2014. The Shireen-1 well on the Dinarta block was spudded on 11 June 2014 and was temporarily suspended, on the 9th August, as a precautionary measure, due to recent developments in the region.
Drilling operations are scheduled to resume in early October if circumstances allow and it is anticipated that completion of drilling on the well will take a further 90 days.
The Shakrok-1 well was plugged and abandoned as a non-commercial Triassic gas discovery. A 25m gas column was encountered in the Triassic reservoir interval but was not tested due to its lack of commercial potential.
After an extensive petrophysical evaluation, drill stem tests were carried out over four zones in the Jurassic; although these tests confirmed the presence of potential high productivity reservoirs, these tests did not flow hydrocarbons to surface.
Unfortunately, this well result also downgraded the remaining prospect on the block. Consequently, the decision was made not to enter the second sub-period on the Shakrok licence and Petroceltic's entire cost of exploration in this block of $50.7m was written-off during the period.
The Shireen-1 well in the Dinarta block is targeting a series of stacked potential reservoir units in the Jurassic and Triassic dolomite formations. The partnership has also commenced civil works and site preparation in respect of the Pires prospect, where a further exploration well is scheduled to commence during the fourth quarter. The Pires well will target a number of stacked potential reservoir units within the Triassic.
Brian O'Cathain (pictured), Chief Executive of Petroceltic, commented:
"Petroceltic's production and development business has delivered a solid performance to date in 2014. The completion of our second Algerian farm-out, the recent Gas Sales Agreement and FEED contract award are important milestones towards unlocking our world class asset at Ain Tsila.
"While our exploration wells during this period did not generate commercial discoveries we have high hopes for our continuing exploration drilling programme in Kurdistan.
"We successfully raised $100m via a share placing with new and existing shareholders, providing financial flexibility. We are progressing plans to step up to the official list of the London and Irish stock exchanges by the end of the year."