WesternZagros gets approval to extend Sarqala-1 well test

Crude oil and natural gas explorer WesternZagros Resources (CVE:WZR) said on Wednesday that it got the green light from the Kurdistan Regional Government to start the extended well test at its Sarqala-1 well.

The well rests in the Garmian Block in the Kurdistan Region of Iraq and was drilled on the crest of the Sarqala structure.

WesternZagros said the Ministry of Natural Resources of the Kurdistan Regional Government approved the extended well test at Sarqala. The crude oil will be trucked during the extended test and likely sold on the domestic market.

WesternZagros' CEO Simon Hatfield said: "The acceleration of the next phase of testing will determine the maximum sustainable production of the Jeribe Discovery, and will enable us to deliver our first light crude oil to market by truck, providing initial cash flow to the company."

"This is a milestone event for us; one which will position WesternZagros for the first time as a producing company in one of the world's most prospective exploration areas."

Currently, the company plans to begin production from the Sarqala-1 well in Oct. at about 2,000 barrels of oil per day (bopd) and push production to about 5,000 bopd by year-end.

Initially, the Sarqala-1 well tested crude oil rates of over 9,000 bopd at a wellhead pressure of roughly 2,400 pounds per square inch. 

WesternZagros said the well was not stimulated and is expected to continue to clean up and increase production capability during the test.

Information taken from the extended well test will be used to assess development activities as well as the potential for increasing production beyond 5,000 bopd. 

A recent report by Fekete Associates, estimates the Sarqala-1 wells maximum open flow for the Jeribe reservoir to be 11,070 bopd.

The well capability is currently limited by tubing size, and production could be increased to a maximum of 13,640 bopd by increasing the tubing size.

Separately, the company said drilling at its third exploration well the Mil Qasim-1 is ahead of schedule and 20 inch casing has been installed at about 750 metres.

The Mil Qasim-1 rests three kilometres to the south-east of the Sarqala-1 discovery well.
Currently, WesternZagros is drilling ahead at approximately 1,200 metres and expects setting the next casing string at 1,600 metres prior to drilling into the targeted Upper Fars Reservoir.

WesternZagros is an international natural resources company engaged in the exploration, development and production of crude oil and natural gas in Iraq. It holds two production sharing contracts with the Kurdistan Regional Government, in Iraq.

The Calgary, Alberta-based company’s stock shot up 5 cents, or 1.02%, to 49 cents Wednesday afternoon on Toronto's junior Venture Exchange.