BOZOI, KAZAKHSTAN, Feb 23, 2010 (MARKETWIRE via COMTEX) — Tethys Petroleum Limited (“Tethys” or the “Company” (TSX: TPL)) today gave further details on the testing of the recent AKD01 (Doris) exploration oil discovery on the Akkulka Block in Kazakhstan and briefed on the Company’s future plans to appraise the discovery.
The upper Cretaceous sandstone interval showed extremely good permeability (in excess of 1.7 Darcy) and a large investigated distance (in excess of 10 kilometres (6.25 miles)) and therefore a large connected volume (some 29 million stock tank barrels). This indicates a very high quality laterally extensive reservoir. The lower Dolomite zone also showed good permeability with a large investigated distance and significant connected volume, however further testing is required to confirm the lateral extent of the reservoir although Tethys has now interpreted a similar zone in a previously drilled well over 16 kilometres (10 miles) to the west. The well test interpretation was carried out by a third party engineering firm.
Graham Wall, Chief Operating Officer, commented, “These test analyses show extremely good reservoir properties, reservoir continuity and production potential, particularly in the upper Sandstone interval. This data will now be put into our appraisal model and it bodes extremely well for the effective development of this oil discovery with a limited number of wells and showing a potentially significant areal extent. These are great results!”
Tethys also laid out its plans for appraisal of the AKD01 oil discovery and further exploration in the surrounding area. These plans are subject to approval by the appropriate Kazakh authorities.
It is planned to drill at least two appraisal wells on the AKD01 (Doris) oil discovery to evaluate and establish the size and potential of the discovery and 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. 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. Tethys has already been approached by drilling contractors to provide rigs for this project and tenders have been issued for both drilling and the seismic programme. The location of the first appraisal well (AKD02) has already been picked on existing seismic data and this well is expected to commence drilling in April 2010. The seismic programme is also expected to commence in Q2 2010 and will be targeted to provide additional data for the second appraisal well which should commence drilling in the summer.
Tethys has identified several other prospects in the area which appear similar to the Doris oil discovery and now that a hydrocarbon system has been proven at the deeper levels the risk on these prospects is reduced significantly. Tethys is now in the process of demobilising its ZJ70 rig “Telesto” from the AKD01 location to a prospect located in a similar structural position some 50 kilometres (31 miles) to the north-west which has been named “Daphne”. This well is expected to commence operations in late April and is planned to target the Cretaceous, Jurassic, Triassic and Permo-Carboniferous intervals. Further exploration drilling on the large surrounding Kul-Bas block is then planned.
Luka Chachibaia, Vice President Operations and Project Manager for the Akkulka/Kul-Bas deep appraisal and exploration programme, commented, “We have a very busy year ahead with respect to our activities on both appraising the AKD01 oil discovery and hopefully finding more oil in our Kazakh Ustyurt basin acreage. We plan to operate two rigs simultaneously as well as conducting the seismic programme and upgrading the testing facilities, and the fact that we have a significant planned programme that is supported by our experience and learning curve in the area will enable us to increase its cost effectiveness. We have recently strengthened the operations team to meet this challenge and we are looking forward to delivering technically successful results.”
Technical detail on the well test analysis
The upper, Cretaceous sandstone zone (2172.6 to 2180.6 metres – 7,126 to 7,152 feet) was recently tested with downhole pressure gauges over a 13 day period. Analysis of this drawdown and build-up data indicates 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 metres (656 feet) 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 kilometres (6.25 miles) (i.e. more than 5 kilometres (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.
Similar analysis of final draw-down and build-up data over the lower, Dolomite zone (2355 to 2367m – 7,724 to 7,764 feet) tested during January indicates 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 kilometres (2.5 miles). The connected volume proved by the test is around 3.8 MMstb, again assuming the connected volume is all oil.
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, 2009 (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: firstname.lastname@example.org Website: www.tethyspetroleum.com In Kazakhstan: PG Communications Ardak Akanov, Managing Director +7 (727) 272 8867, +7 (727) 272 8237, +7 (727) 272 7745 Email: email@example.com In Asia-Pacific: Quam IR Anita Wan, Associate Director + (852) 2217-2999 Email: firstname.lastname@example.org
SOURCE: Tethys Petroleum Limited