BOZOI, KAZAKHSTAN — (Marketwired) — 10/18/13 — Tethys Petroleum Limited (“Tethys” or “the Company”) (TSX: TPL)(LSE: TPL), the E&P Company focused on Central Asia and the Caspian Region, provided an update on operations in Kazakhstan.
AKD08 (“Doto”) Well
The AKD08 (“Doto”) well has reached a depth of 1,368 metres and electric logs have been run in the hole. The 13 3/8th casing is being run and once cemented drilling will recommence in the 12 1/4″ hole section. The Doto well is expected to take approximately 70 days in total to drill to a planned total depth of 3,500 metres using Tethys– own ZJ70 “Telesto” rig. The well is located to the south-west of the Company–s producing Doris field and north of its Dione oil discovery in Kazakhstan. The well is designed to target several potential zones, including the Lower Cretaceous sandstone and Upper Jurassic carbonate sequences as proven in Doris, and also the deeper Triassic sequence.
Whilst drilling in the shallower levels at approximately 600 metres, high levels of gas were encountered and these shows together with the logs indicate a potential gas discovery at the Tasaran stratigraphic level as previously demonstrated to be commercial on test in the nearby AKK14 and AKK15 wells. It is expected that a gas appraisal well could now be incorporated into the forward shallow gas drilling program to test this accumulation.
AKD09 (“Dexa”)
The AKD09 (“Dexa”) exploration well is planned to spud on October 26th, 2013. The well is located to the North-West of the producing Doris field and is designed to target Lower Cretaceous channel sandstone sequences similar to the current major producing unit in the Doris field. It is forecast to take approximately 45 – 50 days to drill to a planned total depth of 2,400 metres.
KBD01 (“Kalypso”)
The KBD01 (Kalypso) comprehensive testing programme initially on the Permo-Carboniferous interval will commence in early December. Currently the well is undergoing operations to conduct a cement job over the 7″ liner section prior to the main testing programme. The testing programme will involve initial perforation and potentially acidisation followed by fracture stimulation of the carbonate interval approximately 4,100 meters below the surface and will take up to one month to complete. Electric logs run over this section indicated more than 100 metres of gross potential hydrocarbon bearing zones in what are interpreted to be shelf limestones with hydrocarbon shows also being noted whilst drilling.
Shallow Gas Drilling Program
The shallow gas exploration program is expected to commence in early November and the wells are expected to be drilled consecutively on a number of additional prospects and leads which have been identified based on seismic data. These are relatively low risk targets and of the last 13 shallow exploration wells previously drilled by Tethys in the Akkulka Block, 11 tested commercial gas. The planned gas exploration wells are typically 600-800 meters measured depth and will take up to three weeks each to drill. Currently these are located mainly in the central and south-eastern part of the Akkulka Exploration Contract and relatively close to existing gas infrastructure and the Akkulka Production Contract area.
Seismic
The latest 3D seismic program on the Akkulka Block is over 78% complete with a planned 100 square kilometres of 3D data being acquired over further prospects identified north west of the producing Doris wells and with similar Cretaceous reservoirs predicted. Furthermore an additional 35 kilometres of 2D data has been acquired and recently processed within the Akkulka block, but targeting additional areas of interest in and around the shallow producing Kyzyloi gas field. This is in addition to the 200 kilometres of 2D seismic data also recently acquired and processed over the wider KulBas exploration area.
Aral Oil Terminal
Following the successful approval of Phase 2b of the Aral Oil Terminal (“AOT”) earlier in the year Phase 3 expansion is expected to be approved some time in November. Under Phase 3 an electrical dehydrator has now been installed and is operationally ready which will significantly improve the quality of oil. It is expected to realise a higher oil price once this equipment is applied in the oil preparation process.
Oil Production
As previously announced due to a programme involving the installation and optomisation of artificial lift equipment and improvements in fluid handling, oil production levels have been temporarily reduced, and currently the field is producing some 2,250 barrels of oil per day. Mechanical issues relating to the effective installation and operation of the downhole pumps have delayed completion of this programme, however it is expected these issues will be resolved within the next ten days whereupon it is planned to resume production of approximately 3,500 barrels of oil per day. The workover and additional testing operations on the AKD03 in the Dione oil field well planned for Q1 2014 are expected to add some 500 bopd subject to test results. The AKD03 well discovered oil in a Jurassic sandstone that is estimated to have approximately 4.25 million barrels of 2P reserves (Gustavson & Associates December 31, 2012) and current expected production of 3,500 bopd does not include any production from this oil field.
The 2P reserves (defined as Proved (Developed Non Producing and Undeveloped) and Probable) attributed to the AKD03 well are included in the oil and natural gas reserves data for our Kazakhstan properties set out in our Annual Information Form for the year ended December 31, 2012 available on sedar.com.
A barrel of oil equivalent (“boe”) conversion ratio of 6,000 cubic feet (169.9 cubic metres) of natural gas = 1 barrel of oil has been used and is based on the standard energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
This press release contains “forward-looking information” which include statements related to the expected drilling period of the exploration wells and expected production levels. Such forward-looking statements reflect our current views with respect to future events and are subject to certain assumptions, including the assumption that the 70-day period (AKD08), 45-50 day period (AKD09) and three week period (shallow gas exploration wells) will be sufficient for drilling the exploration wells to depth and that oil production from our Kazakhstan operations will reach 4,000 bopd in Q1 2014. These forward looking statements are subject to risks and uncertainties, including the risk that the drilling period for the exploration wells will extend beyond the expected periods and that production will not reach 4,000 bopd in Q1 2014 or thereafter because of operational and geological factors. See our Annual Information Form for the year ended December 31, 2012 for a description of risks and uncertainties relevant to our business, including our exploration activities. 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.
Contacts:
Tethys Investor Relations
Sabin Rossi
Vice President Investor Relations
Tethys Petroleum Limited
Media / IR Enquiries
London
FTI Consulting
Ben Brewerton / Natalia Erikssen
+44 207 831 3113
Asia Pacific
Quam IR
Anita Wan
Office phone/fax: +852 2217 2999
Tethys Petroleum Limited
Web:
Mobile site: m.tethyspetroleum.com