BOZOI, KAZAKHSTAN, Feb 07, 2010 (MARKETWIRE via COMTEX) — Tethys Petroleum Limited (“Tethys” or the “Company”) (TSX: TPL) today announced the initial results of testing on the upper zone of the AKD01 oil discovery in Kazakhstan. The upper zone flowed oil at a restricted rate of over 5,400 barrels per day. Combined with the recent testing on the lower zone the AKD01 well has now flowed oil at a combined rate in excess of 6,800 barrels per day.
“The test results on the upper zone of AKD01 show tremendous potential.” commented Dr. David Robson, CEO of Tethys. “Together with the positive results on the testing of the lower zone combined production rates are extremely encouraging and this discovery marks a significant step forward in the Company’s development. We believe this is the first oil discovery in this part of Kazakhstan and these results open up an area of substantial potential in our Akkulka and Kul-Bas blocks where we have further attractive prospects.
Reservoir quality in the upper zone appears very good as does the quality of the produced oil which bodes well for the development of this discovery, as well as the relatively shallow depth of the producing zones. With bigger production tubing and more surface storage it is likely that significantly higher flow rates could be achieved. It is still too early to assess the full potential of this exploration oil discovery but the initial results are very promising and we look forward to an exciting appraisal program and ultimately the development of this discovery.”
Well AKD01 encountered two oil-bearing zones, the lower zone being a Jurassic dolomite sequence at approximately 2,355 metres (7,726 feet) and an upper, Cretaceous sandstone, zone at approximately 2,174 metres (7,133 feet).
The upper zone, which has just been tested, has interpreted net pay of 9 metres (29 feet) with a porosity of 23%. 8 metres (26 feet) were perforated and a maximum flow rate equivalent to 5,436 barrels of oil per day (“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 degree 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 cubic feet 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. No depletion was observed on test and surface pressure buildup data suggests good productivity.
Testing of the lower dolomite reservoir zone was carried out in December 2009 and January 2010 and 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 degree 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 metres (82 feet) 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. The lower zone was sealed off with a bridge plug prior to the testing of the upper zone.
Current mapping indicates that the AKD01 well is in a downdip location on the prospect (named “Doris”) with approximately 56 metres (184 feet) of elevation updip of the well, potentially bringing all of the lower reservoir into the oil zone. The prospect covers a most likely area of roughly 60 km2 (14,826 acres), with some possible downdip upside potential in the upper reservoir zone. The 180 metre (590 feet) vertical separation between these two reservoirs and the different oil gravities suggests that they may not have a common oil-water contact but should be able to be developed simultaneously with a dual completion. The combined flow rate of these two tests in this well was over 8,200 barrels of fluid per day.
The Company’s plans for the appraisal of the Doris prospect (which are still being firmed up) include appraisal drilling and further seismic surveys. Four further similar prospects have been mapped in the Akkulka and Kul-Bas block near to Doris and the results of the AKD01 well significantly improve the exploration potential of these prospects.
The well is situated in a desert location some distance from existing infrastructure and currently with limited storage capacity for oil. A limited trucking operation has already commenced with oil being sold to local traders who collect the untreated oil from the site for use in the local market. Further production testing on AKD01 is planned which will give a better understanding of the well’s potential and will assist in development planning.
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 at the wellsite as well as preliminary analysis. In addition the length of flow periods were restricted due to physical limitations with respect to oil storage at the site.
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