Kurdistan focussed WesternZagros (CVE:WZR) has revealed unexpected results from testing on the Kurdamir-3 well.
Two drill stem tests were carried out. The first flowed a non-commercial volume of oil as well as spent acid, the other encountered water at what the company believes to be either a transition zone or a oil-water contact.
The findings of the test are difficult to interpret, it said. Two more test are now planned for upper zones in the reservoir.
Kurdamir 3 follows two prior wells, both of which were successful.
"While these first two test results are not the best case scenario, we still have a large oil discovery with more work yet to be done to assess it fully," said chief executive Simon Hatfield.
He added: "Large oilfields like Kurdamir will often present some anomalies in the early stages of delineation, and this one is proving no exception.
"We were surprised by the water cut in DST #2 because we had seen evidence during drilling of oil throughout the interval.
"There are also unusual aspects to the position of the water across the four tested intervals in DST #2, so we are not yet certain whether we have found an oil-water contact that will be consistent across the reservoir, or a restricted compartment, sometimes known as perched water, within the oil reservoir.
"The next two tests of the shallower porous interval should provide a more indicative view on the oil deliverability of the reservoir."