ST. PETER PORT, GUERNSEY, Dec 09, 2009 (MARKETWIRE via COMTEX) — Tethys Petroleum Limited (“Tethys” or the “Company” (TSX: TPL)) today provided an update on its ongoing operations in Central Asia.
Amendments to the Akkulka Exploration Contract were approved today by the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan (“MEMR”) which extend the period of this Contract until March 10, 2011 and allows for further testing (including test production) and appraisal of the AKD01 exploration oil discovery (see below) as well as further exploration of both deep and shallow prospects identified on the block.
Testing operations continue on exploration well AKD01, the Company’s first “deep” exploration well in its Akkulka Block. The well reached a total depth of 3,414 m (11,200 ft) and encountered two zones, which were interpreted to have moveable hydrocarbons. This interpretation was confirmed by independent third parties. The lowermost of these zones, which is interpreted to be a Jurassic age dolomite sequence, is currently being tested.
The initial testing from this dolomite zone yielded light oil, with an API gravity of between 45 to 48 degrees. Over 1,500 barrels of this oil have been recovered to date. This zone is interpreted to have 8.2 metres (27 feet) of net pay with a porosity of 16.9% and it appears to be regionally extensive. The well unloaded fluid on cleanup at a rate in excess of 1,000 barrels per day but was unable to sustain continuous flow. Pressure analysis indicates this is due to a reduction in permeability immediately proximal to the wellbore and it has been concluded that to facilitate the flow acidisation is required, which is a common technique used in such reservoirs with these characteristics. The international oilfield service company Schlumberger has been engaged to carry out this acidisation and the necessary equipment is expected to arrive on site within the next two weeks for these operations to commence.
The upper zone is interpreted to be a clean sandstone of lower Cretaceous age and having some 9 metres (29 feet) of net pay with a porosity of 23%. The Company believes this zone to be of better quality than the lower zone and therefore it should demonstrate better production potential. No hydrocarbon-water contact is observed. The upper zone will be tested after completion of the lower zone test and if successful it is planned to place the well on a long-term production test to better establish the potential volume of hydrocarbons being drained by the well.
Analysis of seismic data acquired by the Company and other recently reprocessed seismic data, together with data from the AKD01 well, has resulted in a new interpretation of the AKD01 structure giving a most likely area of some 60 km2.
The Company’s application for a Production Contract for the Central Akkulka shallow gas field (Phase 2 of the Kyzyloi/Akkulka gas development) is in its final stages with the MEMR and the Company expects approval of this contract in the near future. Phase 2 production is fully tested, pipelines and compression installed, and the gas is ready to be produced. Gas production from Phase 1 is currently suspended following a recent request from Intergas Central Asia, the operator of the Bukhara-Urals gas trunkline and Bozoi underground gas storage facility (“UGS”), to suspend production due to technical problems on the UGS that are causing a significant increase in pressure on the Bukhara-Urals trunkline. This suspension is expected to be temporary. Meanwhile the Company is taking the opportunity to carry out maintenance and servicing of equipment at its Booster Compressor Station.
Also in Kazakhstan the Company’s ordinary shares have been admitted to the main list of the Kazakhstan Stock Exchange (“KASE”) with the symbol GG_TPL. This replaces the Company’s previous listing on the Special Trading Floor of the Regional Financial Centre of Almaty (“RFCA”) and is secondary to the Company’s listing on the TSX.
Activities in Tajikistan continue in several areas.
At the Komsomolsk gas field in Dushanbe, operations continue on the KOM200 well. This well is targeting gas in the eastern part of the Komsomolsk field, which lies under the northern suburbs of Dushanbe, the Tajik capital city. The KOM200 well is being drilled directionally using Tethys’ ZJ30 drilling rig and has encountered challenging drilling conditions with several zones of gas influx. Currently the well is at a depth of 1,217 m (3,993 ft) below the Cenomanian sand interval where casing has been set. This well has four target zones consisting of two primary targets in the deeper Hauterivian sandstones and Jurassic limestones and secondary targets in the Bukhara limestone and the Cenomanian sandstones. Due to the immediate energy needs in Dushanbe, it was decided to test the Cenomanian now, where gas had been recorded during drilling, before drilling onwards to the primary targets. Gas was produced during testing but the flow was non-commercial, probably due to its close proximity to another well that had produced from that zone in the past, which had not drilled any deeper and did not justify further testing which may have damaged the well for further drilling. Tethys is now preparing the well to drill ahead to the primary targets.
In the Beshtentak Oil field, rehabilitation work is continuing on the BST80 well which has now been perforated. Gas and oil have been recovered from the well which is now about to be acidized, this being standard procedure on the field. If successful the well will be put on production. An operational gas pipeline system exists on the field taking gas to the city of Kulob to the south, and any oil production could either be refined locally or exported. Five further near term rehabilitation candidates have been identified on the field.
9 5/8″ casing has now been set and cemented on the East Olimtoi exploration well EOL09 is at a depth of 2,901 m (9,518 ft). Sourcing of suitable cementing and pumping equipment caused some delays in cementing the casing. The Company is now preparing to modify and upgrade the drilling and mud system for the next section of the well as well as verifying the precise bottom hole and target location using the seismic data recently acquired by Tethys. This well is being drilled in the south-east part of the Bokhtar PSC area, south of Kulob and just to the north of the Panj river.
Tethys’ regional seismic survey programme continues with seismic now being acquired around the Baljuvon area to the north of Kulob.
Tethys’ new field development well, NUR116, at the North Urtabulak oilfield, is drilling on schedule and currently at a depth of 504 m (1,653 ft) with the 13 3/8 ” casing having been run and cemented. It is planned to drill ahead in the next few days. The NUR116 well is located in the relatively undrilled “NW Salt Zone” of the field and is being drilled for the Company by Xibu Drilling Engineering Company Limited (part of Great Wall Drilling Company) on a turnkey basis.
Tethys is currently completing a dynamic reservoir model for the field, to assist in development planning, and is in the process of introducing several new techniques to increase production including radial drilling and organic acid stimulation.
Tethys believes there is substantially more recoverable oil remaining in the North Urtabulak oilfield, reported as the second largest oilfield in Uzbekistan when discovered. It is expected that the new well will be put on production immediately it is completed.
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 fact that the interim drilling results reported in this press release are not necessarily indicative of the final drilling results once drilling of the relevant wells has been completed.” See our Annual Information Form for the year ended December 31, 2008, other filings and the following paragraph for a description of risks and uncertainties relevant to our business, including our exploration and development activities.
The interpretation of logs to indicate the possible presence of hydrocarbons does not mean that these hydrocarbons are definitely present and if they are present it does not mean these hydrocarbons can be produced in commercial quantities.
Tethys Petroleum Limited
Vice President Investor Relations
416 572 2065
416 572 2201 (FAX)
Ardak Akanov, Managing Director
Office phone/fax: +7 (727) 272 8867, +7 (727) 272 8237,
+7 (727) 272 7745
Anita Wan, Associate Director
+(852) 2217 2687
+(852) 2319 1676 (FAX)
SOURCE: Tethys Petroleum Limited