Recent Press Release Provides lots of Drilling Info-
: WesternZagros Announces Third Quarter 2013 Operational and Financial Results
7:30a ET November 14, 2013 (Dow Jones)
Press Release: WesternZagros Announces Third Quarter 2013 Operational and Financial Results
WesternZagros Announces Third Quarter 2013 Operational and Financial Results
CALGARY, ALBERTA--(Marketwired - Nov. 14, 2013) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
WesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or "the Company") continued to advance numerous exploration and appraisal initiatives on both its operated and non-operated ventures in the Kurdistan Region of Iraq during the third quarter of 2013. On its non-operated venture, the Kurdamir-3 well confirmed the presence of light oil deeper than previously tested at the Kurdamir-2 well, and affirmed the potential of the Kurdamir discovery. On its operated venture, WesternZagros is drilling ahead on two Garmian Block exploration and appraisal wells where testing is expected in the next one to two months. In addition, the Company acquired state of the art 3D seismic data over Kurdamir, Sarqala and the north of the Garmian Block. These data confirm that the Baram prospect is a stand-alone structure with increased potential for success. The 3D seismic data is also a critical tool to identify optimum drilling locations for future wells on both the Kurdamir and Sarqala discoveries. A summary of the activities, the financial statements the accompanying Management Discussion and Analysis ("MD&A") are available at www.westernzagros.com and on SEDAR at www.sedar.com.
Commenting on the third quarter results and subsequent events, WesternZagros's Chief Executive Officer Simon Hatfield said:
"We're pressing forward aggressively with two wells on the Garmian Block. Hasira-1 and Baram-1 have the potential to further increase production capability and contingent resources. Baram-1 well, spudded in August near the Kurdamir discovery, has the highest impact potential of our 2013 drilling program."
"At the same time, we are continuing our analysis of the Kurdamir discovery and incorporating the new information and lessons learned from the Kurdamir-3 well. This well has underscored the need to improve future cementing and acidizing operations; the need to utilize open hole testing whenever possible; the need to utilize 3D seismic data to target highly fractured areas for improved production rates, and the need to pursue horizontal drilling techniques to maximize well deliverability. In addition, the new formation water salinity data will enable us to better predict oil-water contacts on wireline logs in future wells."
Simon Hatfield further commented on the outlook for the remainder of 2013 and 2014:
"During the first half of 2013, we diligently prepared for an increased exploration and appraisal schedule that we began in the third quarter, and will continue through into 2014. We are well positioned as we advance WesternZagros's ambitious plans to deliver production and cash flow from our promising Kurdistan Region light oil discoveries."
"With the commissioning of the new Kurdistan Region oil export pipeline and the rapid development of domestic markets, WesternZagros is looking to declare commerciality on two oil fields - Sarqala this year and Kurdamir in 2014. We've identified four prospective exploration drilling targets in 2014, with Qulijan and Chwar anticipated to spud in first quarter 2014."
Third Quarter Operations Summary
Operated Joint Venture: Garmian Block
In the Garmian Block, WesternZagros is currently drilling ahead on two wells, Baram-1 and Hasira-1, with testing on both expected in the next one to two months. The Baram-1 well has the potential to substantiate gross unrisked contingent resources (mean estimate) of up to 300 million barrels of oil equivalent ("MMBOE"). At the Sarqala-1 well, extended well test ("EWT") production is ready to commence subject to Kurdistan Regional Government ("KRG") approval, and work continues for a planned workover to increase capacity from 5,000 to 10,000 barrels per day ("bbl/d"). WesternZagros is in discussion with its co-venturer, Gazprom Neft Middle East B.V. ("Gazprom Neft"), regarding the declaration of commerciality for the Sarqala discovery which is targeted by the end of 2013.
Baram-1 Well
-- The Baram-1 well was spudded on August 13, 2013 to explore the Oligocene
reservoir.
-- Interpretation of the good quality new 3D seismic data indicates that the
Baram structure is separated from the Kurdamir structure by a fault. This
increases the geological chance of success of Baram-1 to 32%.
-- The well is currently at 3,088 metres and is expected to reach the
planned total depth of 3,800 metres by the end of 2013.
Hasira-1 Well
-- The Hasira-1 well was spudded on June 6, 2013, with the dual objectives
of being a low risk appraisal well for the Jeribe reservoir on the
Sarqala discovery and an exploration well for the deeper Oligocene
formation. The Oligocene exhibited oil shows during the drilling of
Sarqala-1, but was not able to be evaluated at the time.
-- Hasira-1 is currently at 3,919 metres after setting casing just above the
Jeribe reservoir.
-- The well is expected to reach total depth of 4,100 metres in the
Oligocene reservoir by early 2014.
-- The Jeribe reservoir has the potential for 25-50 MMBOE of gross unrisked
prospective resources (mean estimate) while the deeper Oligocene
reservoir has the potential for 50-250 MMBOE of gross unrisked
prospective resources (mean estimate).
-- The well is expected to be completed in either in the Jeribe or the
Oligocene reservoir, depending on testing results.
Sarqala-1 EWT
-- The Sarqala-1 EWT is expected to recommence upon approval from the KRG.
-- Engineering work continues for a workover planned in the first half of
2014 in order to test the ultimate potential deliverability of the Jeribe
reservoir in the Sarqala-1 well. Long lead items have been delivered and
a workover rig is being tendered.
-- The Sarqala-1 workover could increase production capability from 5,000 to
10,000 bbl/d.
-- Preliminary engineering design is advancing on the Sarqala first phase
central processing facility with a 20,000 bbl/d capacity.
-- A dedicated team has been formed by WesternZagros and Gazprom Neft for
the phased development of the Sarqala discovery.
-- Discussions continue with the KRG to advance plans to use natural gas
from the Garmian Block. Gas utilization studies are ongoing and include
the following options: supply of gas via a pipeline for domestic
consumption, gas re-injection to maximize oil recovery, and gas as fuel
for temporary and permanent power generation.
Seismic Acquisition
-- Acquisition of 3D seismic over the northern portion of the Garmian block
commenced on August 6, 2013, in order to better define the areal extent
of the Baram and Qulijan structures. It was completed on September 9,
2013, on time and under budget.
-- Processing of the seismic is anticipated to be completed in Q1 2014. This
data will allow future appraisal wells to be more accurately located to
target reservoir fracturing for higher well deliverability.
-- The analysis of a separate 3D seismic survey over the southern portion of
the Garmian block, including the Sarqala, Mil Qasim and Zardi Complex
structures, is underway with completion anticipated by the end of 2013.
-- WesternZagros expects to benefit enormously from this investment in
seismic data. This data will be used to improve the Company's
understanding of fracturing within the reservoirs in these structures,
and to better define the Jeribe, Oligocene, Eocene and Cretaceous
reservoirs and optimize the number and placement of future development
wells.
-- Processing and interpretation of an additional 2D seismic program over
the Chwar and Alyan structures has been completed.
2014 Potential Exploration Targets
-- Under the Garmian PSC, the exploration period expires on December 31,
2014. Any prospects not drilled, tested and declared commercial by that
date are required to be relinquished and the acreage returned to the
KRG. The Company and its co-venturer, Gazprom Neft, have identified four
potential exploration prospects for exploration drilling in 2014: Qulijan,
Chwar, Qula, and Alyan.
-- The Qulijan and Chwar prospects will be drilled in the first quarter of
2014, which target 86 million and 25 million barrels of gross unrisked
prospective resources (mean estimate) of oil, respectively.
-- The Qulijan prospect has been approved by the co-venturers as the
remaining exploration commitment well and is anticipated to be spudded in
Q1 2014. The well site has been prepared and long lead items ordered.
-- The Company is considering its options with regards to its participation
in the exploration drilling of the other three prospects. Under the Joint
Operating Agreement with Gazprom Neft ("JOA"), a party has the ability to
fully fund an exploration well if the other party elects not to
participate (the "non-consenting party"). The non-consenting party is
able to re-establish its rights in the exploration well, up until a
declaration of commerciality is made, by reimbursing the other party for
its share of the back-costs of the operation plus an agreed upon premium.
-- The Company has decided not to participate in the exploration drilling at
Chwar based upon both the risk/reward profile of Chwar and the Company's
existing financial resources. Gazprom Neft has committed to fund the
entire costs of drilling the Chwar prospect utilizing the terms of the
JOA. The Chwar well is anticipated to spud in Q1 2014 and test the
Jeribe-Dhiban and Mio-Oligocene reservoirs. Well site preparations are
underway and long lead items ordered. The Chwar well will be operated by
(MORE TO FOLLOW) Dow Jones Newswires
November 14, 2013 07:30 ET (12:30 GMT)DN201311140059732013-11-14 12:30:00.00065PTVPHOSI6ASIB3FV8I2UR0RDDJNF
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