Xtract Energy’s Turkish JV Extrem plans to spud new oil prospect in April

Xtract Energy’s (AIM: XTR) 50%-owned joint venture Extrem Energy AS plans to spud the Menekselik-1 well in April. The new prospect is located on the Siraseki licence in Turkey. The well is targeting the Aslantis sandstones which were identified from the results of recent seismic and geochemical surveys.

Since Mobil’s commercial oil discovery in 1960 in the Bulgurdag field, located to the northwest, several wells have been drilled in the area, however none have made any further commercial discoveries. Xtract said that Menekselik-1 aims to unlock the undiscovered potential of the basin.

According to Xtract the target structure is a fault bounded anticline, with an estimated area of 14 square kilometres and an expected net productive pay thickness of 30m. The company believes that the target will be found between 1,647-1,703m.  Menekselik-1 has a planned total depth of 2010m.

Depending upon hydrocarbon shows and results of the wire-line log analysis, cased-hole testing may be carried out on the Menekselik well, Xtract said. Extrem Energy's preliminary pre-drill ‘P50’ estimate of recoverable hydrocarbons in place is 3.8 million barrels of oil, based on an assumed net productive pay thickness of 30m. In terms of the Menekselik field as a whole, the equivalent estimates are 28.8mbbl of oil or 94bn cubic feet in gas, applying recovery factors of 20% and 70% respectively.

Extrem Energy is Xtract’s exploration and production joint venture with Merty Energy of Turkey.  Menekselik-1 will be drilled by Merty Energy's PM-3000 rig, which is currently drilling Sarikiz-3 on the Alasehir licence.

The Sarikiz-3 well which has a target depth of 1,950m, was spudded on 10 January 2010. It is located approximately 525m away from previous discovery well Sarikiz-2. The planned total depth of the well is 1,950m. Whilst the company said the drilling has been slower than expected, as of 2 March, drilling operations are currently at a depth of 1,432m, just above the targeted Alasehir sandstones which are expected to be encountered at between 1,570m and 1,850m.

Elsewhere on the Alasehir license, Sarikiz-2 began production at natural flow rates on the 13 January 2010.

As previously reported by Xtract, a down-hole production pump will be installed by the Merty rig following the conclusion of drilling and testing operations at Sarikiz-3. Once installed the pump is expected to boost Sarikiz-2 oil production to approximately 350 bbl/day. Xtract said it will provide a timing update once it’s clear how long the current Sarikiz-3 operations will take.

According to Extrem, the actual flow rate achieved during the extended test at Sarikiz-2 and the drilling results from Sarikiz-3 will do much to confirm the potential of the Sarikiz oil field. In terms of the next well, Extrem said it is continuing to evaluate the cost/benefit of undertaking 3D seismic survey over the license area, in the meantime, an in-fill programme of 2D seismic has been agreed. The 2D survey will help determine a location for follow-up well Sarikiz-4, which may be at a more significant distance away from the existing wells in order to help test the potential of the wider area.

Extrem Energy has a portfolio of licence interests including the high potential prospect at Candarli Bay in south-west Turkey.

Xtract also owns 50.01 percent of Elko Energy Inc, a Canadian registered oil & gas exploration company which has interests in exploration and production licences in the Danish and Dutch North Sea. Its major asset is in the Danish North Sea: an 80 percent interest on 26 offshore blocks in a 5,400 square kilometres exploration and production licence close to the prolific Central Graben oil field. Elko also holds a 60 percent operating interest in gas-bearing license blocks P1 and P2 in the Dutch North Sea.

Zhibek Resources, 25 percent owned by Xtract, is an oil and gas exploration and production company with a 72 percent interest in the Tash Kumyr and Pishkoran exploration licences in the Kyrgyz Republic.

Xtract's wholly owned subsidiary Xtract Oil Ltd is focused on the development of the company's oil shale resources in Australia and the technology for oil extraction from oil  shale resources. Xtract has oil shale exploration rights over mining tenement in the Julia Creek area of Queensland. In addition to evaluating third party technologies, XOL has been developing proprietary technology for the  commercial extraction of liquid hydrocarbon products from oil shale.

Finally, Xtract Energy (Oil Shale) Morocco SA is a 70/30 joint venture with Alraed Ltd Investment Holding Company WLL, a company controlled by Prince Bandar Bin Mohammed Bin Abdulrahman Al-Saud of Saudi Arabia. XOSM has signed a Memorandum of Understanding with the Moroccan oil and mining ministry regatrding the evaluation and possible development of an oil shale deposit near Tarfaya.

http://www.proactiveinvestors.co.uk/companies/news/13929/xtract-energys-turkish-jv-extrem-plans-to-spud-new-oil-prospect-in-april-13929.html