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Wednesday, 31 October 2012
WesternZagros confirms oil in Eocene reservoir at Kurdamir-2 well
WesternZagros Resources (CVE:WZR) has confirmed oil in the Eocene reservoir - the second of three target intervals in the Kurdamir-2 exploration well in Iraq,
The testing program of the Eocene reservoir was "successfully completed", WesternZagros said Wednesday, as it proved an oil discovery in the naturally fractured limestones of the Eocene Formation.
This follows news from earlier this year, when in March, WesternZagros said that its first drill stem test on the Kurdamir-2 well resulted in a major oil discovery in the Oligocene interval - the primary target of the well.
WesternZagros halted its shares temporarily yesterday in preparation for the news release today, after Talisman Energy(TSE:TLM) included information about the test results in quarterly financial results released Tuesday.
Talisman is the operator of the Kurdamir-2 well. The Kurdamir-2 well is the second deep exploration well to be drilled on the Kurdamir structure, in which WesternZagros and Talisman each have a 40 per cent working interest. The Kurdistan regional government holds the remaining 20 per cent of the Kurdamir Block.
In the Eocene testing, a single cased hole test was performed over a net perforated interval of 108 metres, and resulted in the flow of light, 45 degree API oil at "sub-commercial" flow rates.
No water leg was found and no formation water was recovered during the test, the company said. Following an acid fracture stimulation, the well flowed back a mixture of oil, emulsion and spent acid.
The test was the first of the Eocene interval, and the company said it will further study the target to optimize completion techniques so as to unlock the resource.
The Iraqi-focused oil and gas explorer added that it does not expect its earlier Eocene mean estimate of gross unrisked prospective oil resources of 278 million barrels to change "appreciably" from these latest test results.
But the base of the perforated Eocene reservoir is thought to be around 220 metres below the seismically mapped four-way structural dip closure of the Kurdamir structure, which the company believes suggests Eocene is involved in a larger trap in a similar fashion to the Cretaceous and Oligocene intervals.
"Proving a light oil discovery in the Eocene at Kurdamir-2 was our main objective for this test. This test result provides another piece of evidence that Kurdamir and the neighbouring Tophkana structure share a common oil accumulation in the Eocene reservoir," said CEO Simon Hatfield.
"We are now undertaking further work to better understand the reservoir characteristics and the drilling, completion and stimulation techniques that will be required to make the Eocene a viable commercial reservoir in the future."
The comapny concluded that the Eocene reservoir has the potential to be an "attractive oil resource addition" to the main Kurdamir Oligocene hydrocarbon resource.
The combined audited unrisked mean estimate for all three reservoirs on the Kurdamir prospect is 1,609 million barrels of prospective oil resources as at May 31, 17 percent of which is attributed to the Eocene interval.
After the major oil discovery in the Oligocene reservoir in March, the Kurdamir-2 well was drilled to a total depth of 4,000 metres by June.
Preparations are now underway to conduct a multi-cased-hole testing program on the primary zone of interest in this well, which is the 118 metres of gross oil pay already discovered in the Oligocene that accounts for 72 per cent of the prospective oil resources in the Kurdamir prospect.
Talisman and WesternZagros are working on planning a 3D seismic program over the Kurdamir and Topkhana structures, as well as a further appraisal well to assess the ultimate size of the Kurdamir discovery.