BOZOI, KAZAKHSTAN, Apr 01, 2010 (MARKETWIRE via COMTEX) –Tethys Petroleum Limited (“Tethys” or the “Company”) (TSX: TPL) today announced that it had commenced drilling the AKD02 appraisal well in Kazakhstan.
The AKD02 appraisal well is the first appraisal well of the AKD01 (Doris) oil discovery that flowed at a rate of 6,800 barrels of oil per day (“bopd”) and will provide valuable further information on the size of the new oil field. It is planned to drill at least two appraisal wells on the Doris oil discovery to evaluate and establish the size and potential of the discovery and also to provide the necessary data to obtain a production contract. These wells will be extensively evaluated with coring, detailed geophysical logging and testing. A further appraisal well may also be drilled if deemed necessary after evaluating the results of the first two wells.
Luka Chachibaia, Project Manager of the Company’s Kazakh Oil Exploration Development Team, commented, ” We are very pleased that we have commenced drilling on this important appraisal well on schedule. This well will go some way to assessing the full size of what we believe to be a substantial oil field and we look forward to the results in Mid-2010.”
In addition Tethys plans to carry out a 3D seismic survey over the Doris discovery and shoot additional targeted 2D seismic lines to firm up further potential in the area. Four separate bids to carry out the seismic work have now been received and the contract will be awarded later this week with the seismic planned to commence late May/early June.
In addition to the Doris oil discovery Tethys has identified several other exploration prospects in the area which appear similar to Doris and now that a hydrocarbon system has been proven at the deeper levels the risk on these prospects is reduced significantly. The Company’s ZJ70 rig “Telesto” is fully rigged down and ready for transportation from the AKD01 location to a prospect located to the south-west (named “Dione”) to drill the AKD03 exploration well. Drilling is also planned on the “Daphne” exploration prospect further west. The AKD03 well is expected to commence operations in early May and is planned to target both the Cretaceous and Jurassic intervals where oil has been flowed in the Doris oil discovery, and also the deeper Triassic and Permo-Carboniferous intervals that have further potential. Further exploration drilling on the large surrounding Kul-Bas block is also planned.
The Doris Oil Discovery: Background
The Doris prospect covers a most likely area of roughly 60 km2 (14,826 acres), with some possible downdip upside potential in the upper reservoir zone.
Well AKD01 successfully encountered and tested two oil-bearing zones, the lower zone being a Jurassic dolomite sequence at approximately 2,355 m (7,726 ft) and the upper being a lower Cretaceous sandstone at approximately 2,174 m (7,133 ft).
The lower dolomite reservoir zone flowed (after acidisation) at rates of up to 2,803 barrels of fluid per day on a 24 mm (60/64″) choke with 1,373 bopd and with a flowing tubing head pressure of 14.2 atmospheres (209 psig). The oil was a 45 degrees API light crude oil and test data indicated that the reservoir has good permeability and is laterally extensive. The total thickness of the zone has been interpreted as being approximately 25 m (82 ft) with a possible oil-water contact roughly half way through the sequence. It appears that this deeper water zone was the source of the water produced on test, this being channelled behind the casing following the acidisation. Analysis of final draw-down and build-up data indicated good permeability of 700 millidarcies and a moderate Skin of +6.1, resulting in a well PI of 14.7 stb/d/psi of fluid (with water-cuts up to 45% during the final testing period). The analysis may have shown some indications of depletion but this is not clear with the limited duration of testing and longer term testing would be required to clarify this. Given the build-up time, the distance of investigation of the test was in excess of 4 km (2.5 miles). The connected volume proved by the test is around 3.8 MMstb, assuming the connected volume is all oil. The lower zone was sealed off with a bridge plug prior to the testing of the upper zone.
The upper Cretaceous sandstone zone has interpreted net pay of 9 m (29 ft) with a porosity of 23% and was tested with downhole pressure gauges over a 13-day period. Eight metres (26 ft) were perforated and a maximum flow rate equivalent to 5,436 bopd was achieved on a 12 mm (30/64″) choke with a flowing tubing head pressure of 15.7 atmospheres (230 psig) and with the well still appearing to be cleaning up. The oil is a 37 degrees API light crude which appears to have low viscosity, low paraffin content and a low pour point. The gas-oil ratio is estimated at approximately 331 cf of gas per barrel of oil. No water was observed with the oil and no oil-water contact is interpreted in the sand. The maximum flow rate appears to have been mechanically restricted by the tubing or other downhole equipment and if these restrictions were to be removed then a higher production rate should be possible. Limited storage on site also restricted rate of oil production and the length of the flow period. Analysis of the drawdown and build-up pressure data from the test indicated a very high permeability of 1,750 millidarcies (mD) and a low “Skin” of +1.9, resulting in a high well PI (productivity index) of 29.6 stock tank barrels per day per psi (stb/d/psi) (using industry-standard correlations for the oil properties). No depletion was seen in the test data, although barriers 200 m (656 ft) away from the wellbore in two directions were interpreted which could be faulting or a stratigraphic, lithological or fluid phase change. However, given the long build-up time, the distance of investigation of the test was in excess of 10 km (6.25 miles) (i.e. more than 5 km (3.125 miles) in the other two directions). Due to the large investigated distance the connected volume proved by the test was also very large, being approximately 28.9 million stock tank barrels (MMstb) assuming the connected volume is all oil. Downhole samples have now been taken from this zone for full PVT analysis which will allow a refinement of the test results.
Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan, Tajikistan and Uzbekistan. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.
This press release contains “forward-looking information” which may include, but is not limited to, statements with respect to our operations. Such forward-looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including the risks relating to regulatory approvals and of sufficiency of the proceeds for the purposes contemplated. See the description of risks and uncertainties and underlying factors and assumptions relevant to the offering and “forward looking information” contained herein and to the Company’s business, including its exploration and development activities, contained in the Annual Information Form dated March 31, 2010 (which are incorporated herein by reference). The “forward looking statements” contained herein speak only as of the date of this press release and, unless required by applicable law, the Company undertakes no obligation to publicly update or revise such information, whether as a result of new information, future events or otherwise.
The information presented in this press release on the testing of the AKD01 well is based on initial data and observations and measurements and preliminary analysis. In addition the length of flow periods were restricted due to physical limitations with respect to oil storage at the site. The connected volumes quoted are in-place volumes of hydrocarbons assuming a particular viscosity of reservoir fluid and cannot be considered as reserves.
Contacts: Tethys Petroleum Limited Sabin Rossi Vice President Investor Relations +1 416 572 2065 +1 416 572 2201 (FAX) email@example.com www.tethyspetroleum.com In Kazakhstan PG Communications Ardak Akanov Managing Director +7 (727) 272 8867, +7 (727) 272 8237, +7 (727) 272 7745 firstname.lastname@example.org In Asia-Pacific Quam IR Anita Wan Associate Director + (852) 2217-2999 email@example.com
SOURCE: Tethys Petroleum Limited