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Message: WesternZagros Starts Kurdamir-3 Testing Program and Provides Operational Update
|July 18, 2013|
WesternZagros Starts Kurdamir-3 Testing Program and Provides Operational Update
|CALGARY, ALBERTA--(Marketwired - July 18, 2013) - WesternZagros Resources Ltd. (TSX VENTURE:WZR) ("WesternZagros" or the "Company") is pleased to provide the following operational update of testing, drilling and seismic operations on the Kurdamir and Garmian Blocks:
-- The Kurdamir-3 well has reached total depth and started the testing program on the well; -- The Baram-1 well, in the northern portion of the Garmian Block, is on- track to spud in August; -- The Hasira-1 well, in the southern portion of the Garmian Block, is currently drilling ahead at 1,860 metres; -- The low-cost drilling program in the Upper Bakhtiari formation was cancelled after sub-commercial flow rates of oil at the first two wells; -- The Kurdamir Block 3D seismic survey is completed and the northern Garmian Block 3D seismic survey is expected to begin in August.
"Everything we have seen while drilling the Kurdamir-3 well supports our optimism about the size of the Oligocene reservoir in the giant Kurdamir oilfield. The Oligocene is thicker in the Kurdamir-3 well than penetrated in the Kurdamir-1 and Kurdamir-2 wells. We did not see gas at the top of the oil interval, nor did we encounter water at the bottom. We look forward to the results of the testing program."
A cased hole, multiple test program of the Oligocene reservoir in the Kurdamir-3 well has commenced. The Operator, WesternZagros's co-venturer, Talisman (Block K44) B.V. ("Talisman") drilled the well to a total depth of 2,895 metres and has set casing within the Tertiary-age Oligocene reservoir. The well is located five kilometres southwest and down-dip of the Kurdamir-2 well in what the co-venturers interpret to be a thicker portion of the Oligocene reservoir. The Kurdamir-3 well successfully penetrated the oil column without encountering the gas cap.
Oil shows and supportive log data indicative of oil were recorded over the majority of the Kurdamir-3 Oligocene section penetrated. The Oligocene comprises a gross interval of 372 metres of naturally-fractured marlstones and dolomitic limestones including an interpreted 194 metres of porous reservoir interval. By comparison, the Kurdamir-2 well penetrated a gross interval of 300 metres of which 140 metres comprises the Oligocene porous interval. Coring and wireline logging operations have concluded and the wellbore is cased with a seven inch diameter production liner in preparation for testing. No evidence of formation water has been detected.
The first well test at Kurdamir-3 will perforate the deepest interval between 2,776 and 2,788 metres. Based on initial logging results, the Company believes that the lowest known oil could extend approximately 150 metres deeper than that proven in Kurdamir-2. The testing program will then move up-hole to focus on testing the potential of the porous reservoir section. The Company expects to complete the Oligocene testing program in the second half of August.
Assembly of the Baram-1 well drilling rig is underway and on track for the anticipated spud date in the first half of August. The Baram-1 well will explore the potential extension of the oil leg discovered in the Oligocene reservoir of the Kurdamir structure onto the northern portion of the Garmian Block. The Company expects the well to take approximately five months to reach the planned total depth of 3,800 metres.
The Company believes that this is the highest impact well of the 2013 drilling program and has the potential to add gross unrisked mean contingent resources of up to 200 to 300 million barrels of oil equivalent ("MMBOE") in the Garmian Block and, if the structure is shown to extend onto the existing Kurdamir discovery, an additional 500 to 600 MMBOEs in the Kurdamir Block.
The Hasira-1 appraisal and exploration well is currently drilling ahead at 1,860 metres after setting 20 inch casing at 1,014 metres. The next casing point is at 2,050 metres. Setting the third intermediate string of casing is planned for approximately 3,900 metres just above the Jeribe reservoir, before drilling to a planned total depth of approximately 4,100 metres in the Oligocene reservoir. WesternZagros plans to complete the well either in the Jeribe or the Oligocene reservoir depending on drilling and testing results. The Company expects Hasira-1 to take approximately seven months to drill.
Upper Bakhtiari Drilling Program
WesternZagros drilled two of the planned three wells in the Upper Bakhtiari formation. This shallow, inexpensive well program recovered oil and gas at sub-commercial rates and formation water. The wells have consequently been suspended and the rig released. As a result, the third well has been cancelled. The Upper Bakhtiari program was exploring low-cost oil production potential in the South Garmian area, but it was not viewed as a high-potential program to add significantly to the Company's resource estimates.
KURDAMIR AND GARMIAN 3D SEISMIC SURVEYS
The acquisition of the Kurdamir Block 3D seismic survey, which comprises 184 square kilometres, has been completed in order to define more clearly the areal extent of the Oligocene, Eocene and Cretaceous reservoirs. Following the completion of seismic operations on the Operator's neighbouring block, the seismic crew will commence a new 3D seismic survey on the northern portion of the Garmian block in August.
The North Garmian survey encompasses 258 square kilometers on the Garmian Block in order to define more clearly the areal extent of the Oligocene reservoirs. The North Garmian and Kurdamir 3D surveys will be combined to provide contiguous seismic coverage in order to determine whether the Oligocene reservoir is connected as one large structure across the two blocks. The data from this survey will be used to decide on future appraisal and development well locations, and to refine resource assessments.
About WesternZagros Resources Ltd.
WesternZagros is an international natural resources company focused on acquiring properties and exploring for, developing and producing crude oil and natural gas in Iraq. WesternZagros, through its wholly-owned subsidiaries, holds a 40 percent working interest in two Production Sharing Contracts with the Kurdistan Regional Government in the Kurdistan Region of Iraq. WesternZagros's shares trade in Canada on the TSX Venture Exchange under the symbol "WZR".
This news release contains certain forward-looking information relating, but not limited, to future drilling and appraisal plans, and the timing associated therewith. Forward-looking information typically contains statements with words such as "anticipate", "plan", "estimate", "expect", "potential", "could", or similar words suggesting future outcomes. The Company cautions readers not to place undue reliance on forward-looking information as by its nature, it is based on current expectations regarding future events that involve a number of assumptions, inherent risks and uncertainties, which could cause actual results to differ materially from those anticipated by WesternZagros. In addition, the forward-looking information is made as of the date hereof, and the Company assumes no obligation to update or revise such to reflect new events or circumstances, except as required by law.
Forward-looking information is not based on historical facts but rather on management's current expectations and assumptions regarding, among other things, timely receipt of all necessary stock exchange approvals, plans for and results of drilling activity and testing programs, future capital and other expenditures (including the amount, nature and sources of funding thereof), continued political stability, and timely receipt of any necessary government or regulatory approvals. Although the Company believes the expectations and assumptions reflected in such forward-looking information are reasonable, they may prove to be incorrect. Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated by WesternZagros including, but not limited to, risks associated with the oil and gas industry (e.g. operational risks in exploration; inherent uncertainties in interpreting geological data; changes in plans with respect to exploration or capital expenditures; interruptions in operations together with any associated insurance proceedings; the uncertainty of estimates and projections in relation to costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and risk associated with international activity. For further information on WesternZagros and the risks associated with its business, please see the Company's Annual Information Form dated March 22, 2013 ("AIF") which is available on SEDAR atwww.sedar.com.
In addition, statements relating to "contingent resources" contained herein are deemed to be forward-looking statements, as they reference a potential discovery of contingent resources and if discovered, there is an implied assessment, based on certain estimates and assumptions, that the resources described can be economically produced in the future. Terms related to resource classifications referred to herein are based on the definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook which are as follows. "Contingent resources" are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent resources have an associated chance of development (economic, regulatory, market and facility, corporate commitment or political risks). The potential contingent resources referred to herein have not yet been discovered and have not been risked for the chance of development. There is no certainty that any portion of the contingent resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the contingent resources. The contingent resources estimates presented are gross volumes for the indicated reservoirs, without any adjustment for the Company's working interest or encumbrances. A barrel of oil equivalent (BOE) is determined by converting a volume of natural gas to barrels using the ratio of 6 million cubic feet (Mcf) to one barrel. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. The Company's Statement of Oil and Gas Information contained in the AIF contains additional detail with respect to the Company's resource assessments and includes the significant risks and uncertainties associated with the estimates and the recovery and development of the resources, and, in respect of contingent resources, the specific contingencies which prevent the classification of the resources as reserves.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
WESTERNZAGROS RESOURCES WAS RECOGNIZED AS A TSX VENTURE 50(R) COMPANY IN 2012 AND 2013. TSX VENTURE 50 IS A TRADE-MARK OF TSX INC. AND IS USED UNDER LICENSE.
|WesternZagros Resources Ltd.
Chief Financial Officer
WesternZagros Resources Ltd.
VP Business Development
WesternZagros Resources Ltd.
Manager of Investor Relations
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