WesternZagros' Kurdamir-2 well doubles oil resource potential of Eocene reservoir

WesternZagros Resources (CVE:WZR) said Thursday it has more than doubled its mean contingent resources in a revised assessment of the Eocene reservoir at its Kurdamir-2 exploration well in Iraq.
The revised mean prospective resource is now 278 million barrels of oil (MMbbl) as of June 1, 2012, compared to the 124 MMbbl reported previously, said the company.
The Eocene reservoir is the second of the three targeted reservoirs in the Kurdamir-2 well, which is currently being drilled.
The “substantially revised” prospective resource assessment (PRA), prepared by Sproule International Ltd., is based upon the Kurdamir-2 well encountering an interpreted oil-bearing, fractured Eocene reservoir section with a gross thickness of 275 metres.
"The petroleum potential of our exploration blocks, which has always been highly promising, continues to exceed our expectations, particularly at Kurdamir," said CEO Simon Hatfield.
"Doubling our resource estimates in the Eocene reservoir, after tripling our estimates in the first reservoir target, the Oligocene, bodes well for the potential in the third reservoir target in the Cretaceous still ahead of us."
In April, WesternZagros increased its mean contingent resources in the Oligocene reservoir at its Kurdamir-2 well by around 400 percent following the discovery of a giant oil field.
As a result of the find, the company said that its estimate of unrisked contingent resources increased to 147 million barrels of recoverable oil (corresponding to 464 million barrels of mean estimated gross discovered oil initially in place) for the Oligocene reservoir in the Kurdamir block.
WesternZagros explained that the PRA announced Thursday was conclusive based on a petrophysical interpretation of the Kurdamir-2 wireline logs through the Eocene reservoir, as well as mud gas data, hydrocarbon shows from cuttings, correlation to the Kurdamir-1 well and revised seismic mapping.
Similar to the Oligocene reservoir, the company noted that the lowest known oil in Kurdamir-2 is interpreted to indicate that the oil column extends much deeper than the limit of four-way closure of the Kurdamir structure, as mapped on seismic.
This suggests that the Eocene reservoir is involved in a much larger trap, which also likely extends off the Kurdamir Block onto the adjacent blocks.
The company also provided an update of its ongoing operations Thursday, noting that in the Kurdamir-2 well, after an intermediate casing was set in the Aaliji seal at 3,140 metres, drilling continues at a current depth of 3,427 metres, with the approximate total depth anticipated to be 4,072 metres.
Under the Kurdamir production sharing contract (PSC), the Kurdamir-2 well, which was spudded last October, is required to be drilled by the end of June this year, after which a testing program of indicated pay intervals of the Cretaceous reservoir will follow.
The company is also working with operator Talisman Energy (TSE:TLM) (NYSE:TLM) to examine options for cased hole testing of the 118 metres of gross oil pay in the Oligocene reservoir, and the 275 metres of gross oil pay in the Eocene reservoir.
WesternZagros said the co-venturers are also planning a 3D seismic program over the Kurdamir structure and a further appraisal well - Kurdamir-3 - to assess the ultimate size of the Oligocene and Eocene reservoirs.
The Kurdamir-2 well is located approximately two kilometres northeast of the Kurdamir-1 discovery well and is targeting the Oligocene, Eocene and Cretaceous reservoirs on the flank of the structure where the combined potential oil interval is likely at maximum thickness.
WesternZagros and Talisman each have a 40 percent working interest in the Kurdamir Block, with the Kurdistan regional government holding the remaining 20 percent.
In other news, the company reported Thursday that after eight months on extended well test, the Jeribe and Upper Dhiban formations in Sarqala-1 in Kurdistan have produced roughly one million barrels of light oil.
WesternZagros said it is in discussions with the Ministry of Natural Resources of the Kurdistan regional government with respect to a declaration of commerciality, and the submission of a development plan for Sarqala.
While the company was preparing a well for production at Sarqala, the subsurface valve malfunctioned.
WesternZagros said it is currently securing specialized equipment to remediate the issue and anticipates that it could take a minimum of one month to complete.
Through its wholly-owned subsidiaries, the company holds two production sharing contracts with the Kurdistan Regional Government in the Kurdistan region of Iraq.