Monday, 19 November 2012

WesternZagros says first cased hole test in Oligocene interval at Kurdamir-2 far exceeds expectations

WesternZagros Resources (CVE:WZR) says it has far exceeded expectations in the first cased hole test in the Oligocene formation of the Kurdamir-2 well in Iraq, and anticipates that its contingent resources estimate will rise "signficantly" as a result. 
The junior oil and gas explorer has a 40 per cent working interest in the Kurdamir block, while Talisman Energy(TSE:TLM), the operator of the well, also holds a 40 per cent working interest, with the Kurdistan regional government holding the remainder. 
The cased hole test is the first of three such planned tests in the Oligocene formation of the Kurdamir-2 well - the primary target of the well.
WesternZagros said Monday that flow rates of up to 3,450 barrels per day of light oil were achieved from the 20 metre perforated interval - the deepest of the planned Oligocene tests.
It now interprets the Oligocene oil leg encountered in the well to be around 146 metres in minimum thickness, compared to its previous estimate of 118 metres. 
"This first cased-hole test result far exceeded our expectations from what we consider to be the poorest quality portion of the reservoir," said WesternZagros CEO, Simon Hatfield, in a statement. 
"The primary objective of testing this deepest interval was to establish lowest known oil. We now look forward to determining the flow rate from the two additional tests in the main zone of the increasingly promising Oligocene reservoir."
The maximum flow rate of 3,450 bbl/d of light oil and 8.8 mmcf/d of natural gas was reached after flowing and stabilizing the well for two days at progressively larger choke sizes. 
The oil was high quality 38 degree API and no formation water was detected, the company added. 
It said the expected increase in its contingent resources is based on the now proven lowest known oil in the Kurdamir-2 well at 2,590 metres - 28 metres deeper than reported following the initial open-hole test conducted earlier this year in March, which resulted in a major oil discovery in the Oligocene interval. 
The results also show that the prospective resources contained in the Oligocene formation still extend further down the structure, the company said, which will be tested in the upcoming Kurdamir-3 well - to be drilled once current operations on Kurdamir-2 are wrapped up. 
In the meantime, operator Talisman will continue with the testing program of two additional Oligocene intervals at Kurdamir-2. Once this is done, test and wire log data will be analyzed and WesternZagros will release an updated resource estimate for the Oligocene. 
The junior oil and gas play has seen notable achievements from the Kurdamir-2 well lately. Just last month, the company confirmed oil in the Eocene reservoir - the second of three target intervals in the Kurdamir-2 exploration well. 
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. 
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. 

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