GRAND CAYMAN, CAYMAN ISLANDS, Nov 12, 2010 (MARKETWIRE via COMTEX) —
Tethys Petroleum Limited (“Tethys” or the “Company”) (TSX: TPL) today provided an operational update alongside its third quarter 2010 financial results.
Operational Update – Kazakhstan, Uzbekistan and Tajikistan
RECENT HIGHLIGHTS Kazakhstan (Doris discovery and oil exploration) -- 3D and 2D seismic acquisition program due to be completed end of November 2010. The key to 'unlocking' the Doris oil discovery and further exploration targets. -- G6RE well drilled to 2,835 metres with prospective hydrocarbon zones identified. Upper Jurassic carbonate is planned to be tested with hydraulic fracture stimulation. Sidetrack planned to test deeper zone which shows good potential on wireline logs. -- AKD02 to be tested immediately after G6RE, also with hydraulic fracture stimulation. -- AKD03 drilled to 3,862 metres of a planned TD of 4,400 metres. Four potential hydrocarbon intervals identified to date. Tajikistan -- Komsomolsk well KOM201 reached TD of 2,456 metres with 310 metre column of Jurassic Limestone with indications that it is potentially gas- bearing. Testing planned this month. -- East Olimtoi exploration well EOL09 specialised equipment arrived and drilling will now recommence. -- Radial drilling program planned for Beshtentak oilfield. -- Seismic data acquisition continues. Uzbekistan -- Radial drilling programme completed - awaiting results but appears successful. -- NUR96H2 horizontal well commenced.
Kazakhstan Operational Update
The appraisal programme on the Doris oil discovery and further exploration on the Akkulka block is continuing. Operations are currently underway on three wells namely, AKD02, G6RE and AKD03. All three wells have possible oil bearing zones which are being evaluated. In conjunction with this drilling the 3D seismic survey is also nearing completion.
The AKD02 appraisal well is drilled and awaiting stimulation and testing. The initial testing shows some inflow but as in the Jurassic carbonate zone in AKD01 acidisation (and likely hydraulic fracture stimulation) will be required to fully evaluate the potential of this zone. This well may be side tracked subject to the results of the Cretaceous zone testing and the 3D seismic. Data from the AKD02 well showed the Cretaceous to be thicker than initially expected, and pressure data from this well and from the testing of AKD01 indicates a potentially significantly deeper oil-water contact in the Cretaceous reservoir than was expected from the initial seismic mapping (prior to the current 3D survey). This will be stimulated and tested after the G6RE well.
The G6RE sidetrack well, which is located approximately 16 km to the west of the AKD01 well on the separate “Dodone” prospect, is a re-entry of a previously drilled well and has been drilled to a depth of 2,835 metres encountering the potential hydrocarbon bearing zones identified in the original well G6. The most attractive of these zones is a 20 metre zone at a depth of approximately 2,775 metres which shows good hydrocarbon saturations. It was planned to carry out a production test on this deeper zone first, but this zone was found to have significantly higher pressures than expected thus the well configuration was not optimum for such a test. As such the well has been plugged back to the casing shoe at 2,392 metres and a flow test is being carried out on the upper Jurassic carbonate zone (the lateral equivalent of the lower zone in AKD01). This interval, which is at a depth of approximately 2,320 metres appears to have significantly lower porosity than the deeper zone in this well but nonetheless potential hydrocarbons in the rock. Testing of this interval is currently ongoing with a 12 metre section having been perforated and a low pressure acidisation applied. Pressure was observed at the wellhead but following the recommendations of Schlumberger a full hydraulic fracture stimulation design will now be carried out which will involve mobilising additional high pressure pump capacity to the field but the timing of this fracture stimulation has not yet been finalised. Following testing of the upper Jurassic interval it is planned to sidetrack the well to reach and test the deeper potential hydrocarbon bearing zone observed in G6, in this instance it is planned to set the casing deeper to cope with the higher pressures now known to exist in this deeper zone so that zone can then be tested optimally.
The AKD03 (“Dione”) exploration well, which is located approximately 10 km to the south-west of the AKD01 Doris discovery well (on a separate prospect), is currently drilling ahead at a depth of 3,862 metres. This well is planned to be drilled to a depth of approximately 4,400 metres aiming for total depth in the Permo-Carboniferous sequence. Four potential hydrocarbon intervals have been encountered to date, identified from drilling and/or wireline log data. These comprise a potential oil bearing zone in good quality Cretaceous sandstones (these appearing similar to the reservoir in the AKD01 Doris discovery well), an upper Jurassic carbonate zone (as encountered in AKD01, AKD02 and G6) a further sandy carbonate interval below the Jurassic carbonate, and a potential oil bearing interval in the deeper middle Jurassic sequence. This is a coal bearing sequence of probable deltaic origin, with hydrocarbon indications in likely channel sandstones. The deeper target for this well is in the Triassic sequence (which had oil shows in thin sands in well AKD01), and potentially the upper part of the Permo-Carboniferous. Once drilling is completed, testing of this well is planned with the objective of assessing the potential for the production of commercial hydrocarbons and the possible extent of the reservoirs.
With respect to seismic data acquisition, some 290 km2 of 3D seismic data has now been acquired which the Company believes will be the catalyst for the full appraisal of the Doris oil discovery with resulting drilling commencing once these data are interpreted. Additionally, a further 88 km2 of 3D data is also being acquired over the Dodone prospect, and a 45km 2D dataset has been acquired over the Daphne exploration prospect also in the Akkulka block and with similar potential. In the Kul-Bas exploration block, a 122km 2D seismic programme has already been interpreted and used to define a new exploration prospect similar to Doris named Kalypso. The Company expects this entire seismic program to be fully interpreted by year end with the additional appraisal and exploration prospects to be identified at that time, which the company has already funded through the recent US$100 Million equity financing.
Tajikistan Operational Update
The Company is currently working on an exploration / appraisal drilling programme on the Komsomolsk structure under the capital city of Dushanbe, drilling of an exploration well in the south-east of its Contract Area south of the city of Kulob, increasing oil production from the Beshtentak oilfield in the north-east of its Contract Area, and acquiring additional seismic data for future exploration.
The Company has recently completed drilling of the directional exploration well KOM201 well on the eastern part of the Komsomolsk structure. KOM201 has now reached, as planned, a total measured depth of 2,456 metres in what is interpreted to be the Triassic sequence. The well drilled through a thick sequence of Jurassic limestone of some 310 metres that appears to be gas-bearing with good gas shows, good pressures and up to 56% hydrocarbon gases recorded at surface which is encouraging. The initial results show that the reservoir has similar characteristics to other commercial gas wells in the area. It is planned to carry out an open hole test on this thick sequence with initial results expected before the end of this year. An additional potential gas-bearing zone was encountered in the Cenomanian, which is also productive in the immediate area. This well is targeting the unexplored east part of the East Komsomolsk structure that has not been produced historically.
The East Olimtoi exploration well EOL09 is targeting an attractive prospect on the edge of a salt induced structure some 40 km south-west of the city of Kulob. Operations on the well were suspended for some time waiting on the arrival of specialist equipment (which required permits) from the United States. This equipment has now arrived and the well is being prepared for the re-commencement of operations. The well is currently at a depth of 2,901 metres and is targeting a Palaeogene reservoir prognosed at a depth of 3,800 metres.
Limited oil production commenced on the Beshtentak oilfield in January of this year. This production has been achieved through simple workovers on existing wells. Work on the field resulting from the full field computer modelling carried out by the UK engineering company OPC suggests that additional oil could be recovered from the field and studies are underway to look at the viability of a new well – probably inclined or horizontal. Meanwhile, given the technical success of the radial drilling programme which the Company has recently undertaken on the North Urtabulak field in Uzbekistan a programme of radial drilling is planned on Beshtentak, this being the first time such technology has been applied in Tajikistan and given the shallower depth of the reservoir may be even more effective than in North Urtabulak.
The Company’s seismic acquisition programme continues, these data being primarily aimed at identifying further exploration potential. The Company has previously stated that it is seeking a suitable farm-in partner for its exploration programme in Tajikistan and these seismic data are an important part of the information relating to such a potential farm-in. Discussions with several parties are ongoing.
Uzbekistan Operational Update
The Company has just completed a radial drilling programme on five wells on the North Urtabulak oil field, with four of the wells having four laterals, and one with eight laterals. Technically the radial drilling appears to have worked successfully with horizontal lateral bores up to 100 metres being achieved in the reservoir. It is still too early to say what will be the ultimate effect on oil production (as such laterals typically take some time to clean up) however on some wells there appears to have been a significant increase in oil production. It is hoped that the application of this technology, never before applied in this region, will result in increased production on this field. If successful, the Company would expect to expand its programme of radial drilling on suitable deposits.
The Company has now commenced a new conventional horizontal development well (NUR96H2) on the North Urtabulak field. This well, which is twinning a previous well which produced over 2,000 bopd prior to a mechanical failure in that well, is being drilled in what is the most prolific part of the reservoir. It is expected that this well will be put on production by the end of the year and will add significantly to field production.
Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Tajikistan, Kazakhstan 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. See our Annual Information Form for the year ended December 31, 2009 for a description of risks and uncertainties relevant to our business, including our exploration activities. Hydrocarbon indications from drilling or wireline log data from intervals in a well are not definitive and there is no guarantee that such intervals will flow commercial quantities of hydrocarbons, or indeed flow any hydrocarbons to surface.
Contacts: Tethys Petroleum Limited Sabin Rossi Vice President Investor Relations Office: +1 416 572 2065 +1 416 572 2201 (FAX) info@tethyspetroleum.com www.tethyspetroleum.com Tethys Petroleum Limited TD Canada Trust Tower 161 Bay Street, 27th Floor Toronto N5J 2S1, Canada Mobile site: http://m.tethyspetroleum.com In Asia-Pacific Quam IR Anita Wan, Associate Director + (852) 2217-2999 + (852) 2217-2999 (FAX) anita.wan@quamgroup.com Quam IR 3/F Fung House Moving 19-20 Connaught Road Central, Hong Kong Hong Kong
SOURCE: Tethys Petroleum Limited
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