SAINT HELIER, Jersey, May 15, 2014 /CNW/ - LONGREACH OIL AND GAS LIMITED (TSXV: LOI) (the "Company" or "Longreach") has encountered two prospective natural gas zones with its Kamar-1
well on the Kechoula structure, located in the Sidi Moktar licence in
the Essaouira Basin of Morocco. One zone was in the targeted Lower
Liassic formation and the other in the Lower Dogger/Upper Liassic
formations.
"These are very promising exploration results from our second Moroccan
well, which adds vital, new technical evidence to our growing
understanding of the large resource potential in the Kechoula
structure. Most importantly, our Kamar-1 well did not encounter any
bottom water, which is excellent news for Longreach shareholders and
our Moroccan partners," said Dennis Sharp, Longreach's Executive
Chairman.
The Kamar-1 well was drilled to a final total depth of 2,790 metres and
intersected two distinct gas-bearing intervals. One is in the targeted
Lower Liassic natural gas zone and has a gross interval of 110 metres
as defined by petrophysical, wireline logs. The other is defined by the
presence of significant natural gas volumes in the drilling mud within
the Lower Dogger/Upper Liassic zone, which occurs over a gross interval
of approximately 100 metres.
"The absence of water in the Lower Liassic formation at the Kamar-1
location adds credence to our previous hypothesis that the incursion of
abnormally high-pressured salt water in the Koba-1 well is localized
and not an indication of water present in the bottom of the Lower
Liassic formation throughout the Kechoula structure," Sharp said.
Kamar-1 was drilled following a disciplined path that capitalized on the
lessons learned in Koba-1, which was drilled in late 2013 at a location
four kilometres to the northwest. Kamar-1 intersected the Lower Liassic
at a depth of 2,132 metres, where, after penetrating some 30 metres,
drilling was halted in order to obtain intermediate logs. These logs
were interpreted and a number of gas-bearing intervals were selected to
test for flow rates, pressures and composition. However, the
wireline-conveyed testing equipment was unable to obtain conclusive
data about potential flow rates. Once completed, drilling resumed until
the total depth of 2,790 metres was achieved and then a final suite of
petrophysical logs, acoustic check-shot data and selected side wall
cores were obtained.
These data are currently being processed, reviewed, analysed and
integrated with the Koba-1 results for the purpose of designing an
extensive formation testing program over the gas-bearing intervals
encountered at both the Koba and Kamar wells. Contingent on the results
of this testing program, a follow-up 3-D seismic program aimed at
better identifying potential appraisal drilling locations is planned.
Delineating and defining a hybrid natural gas reservoir
Longreach's exploration mapping, drilling, logging and core samples data
are continuing to define the Kechoula gas-charged structure as
geologically complex. Rock sample analyses to date show an internal
geological character containing sedimentary beds that are porous and
permeable, representing traditional conventional reservoirs,
interbedded with tighter sandstones, or unconventional reservoirs that
typically span extensive areas and have the potential to yield long
productive lives.
Longreach believes it has encountered a hybrid reservoir that holds
substantial resource potential. Unlocking this potential requires a
comprehensive technical approach, employing both conventional and
unconventional reservoir completion techniques of the type that have
underpinned North America's recent oil and gas production revolution.
Reservoir evaluation continues alongside plans to secure financing for
future operations
Evaluating Longreach's first two exploration wells and the Kechoula
structure represents the initial work in the Company's four-step
process to creating sustainable, economic value from prospective
reservoirs. The Longreach approach to value creation is founded in: 1)
understanding the reservoir; 2) designing a recovery method that
maximizes value; 3) implementing cost-effective development; and 4)
generating sustainable netbacks using sustainable practices. The
Company's Moroccan value creation work is at the early stages of this
well-established and well-recognised methodology - a disciplined
process that has seen the Company's Canadian technical team generate
repeated economic success in a series of companies across the Western
Canada Sedimentary Basin over the past 30 years. The Company's next
steps in Morocco are expected to include continued evaluation of
exploration results to date, which will help define future field work
and program plans. Longreach is also planning to conduct financial
planning to source the capital required to fund continued work to fully
understand the Kechoula structure - essential work that will help set
the foundation for potential natural gas production for Longreach and
its Moroccan partners at Kechoula and other prospects within the Sidi
Moktar acreage.
About Longreach
Longreach is an independent Canadian oil and gas company focused on its
significant land position in Morocco. The Company has a 50 percent
operated interest in the Sidi Moktar licence area covering 2,683 square
kilometres and is working closely with ONHYM as a committed long-term
partner to unlock the hydrocarbon potential of the region. Morocco
offers a politically stable environment to work within and has
favourable fiscal terms to energy producers. Longreach is a public
company listed on the TSX Venture Exchange under the symbol "LOI".
Additional information about the Company can be found at www.longreachoilandgas.com and under the Company's SEDAR profile at www.sedar.com.
Special Note Regarding Forward Looking Statements
This press release contains forward-looking statements. Such
forward-looking statements relate to future events or the Company's
future performance. All statements other than statements of historical
fact are forward-looking statements. Forward-looking statements are
often, but not always, identified by the use of words such as "may",
"will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "project", "potential", "targeting", "intend",
"could", "might", "continue" or the negative of these terms or other
similar terms. Forward-looking statements in this press release
include, but are not limited to, statements regarding the drilling of
the Karmar-1 well at the Company's operated Sidi Moktar onshore license
area in Morocco; the continued absence of water at the bottom of the
Lower Liassic formation throughout the Kechoula structure; the ability
of the Company to conduct a follow-up 3-D seismic program; the ability
of the Company to successfully verify the potential of the Kechoula
structure; the ability of Longreach to successfully employ the
four-step process of exploration methodology at its exploration wells
and the Kechoula structure to allow management to repeat the success
enjoyed in the Western Canada Sedimentary Basin; and the ability of the
Company to source the capital required to fund continued work to fully
understand the Kechoula structure. Forward-looking statements are only
predictions. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. Some of the risks and other factors which
could cause results to differ materially from those expressed in the
forward-looking statements contained in this press release include, but
are not limited to: general economic conditions in Canada, the Kingdom
of Morocco and globally; industry conditions, including fluctuations in
the price of oil and gas, governmental regulation of the oil and gas
industry, including environmental regulation; fluctuation in foreign
exchange or interest rates; risks inherent in oil and gas operations;
political risk, including geological, technical, drilling and
processing problems; unanticipated operating events which could cause
commencement of drilling and production to be delayed; the need to
obtain consents and approvals from industry partners, regulatory
authorities and other third-parties; stock market volatility and market
valuations; competition for, among other things, capital, acquisitions
of reserves, undeveloped land and skilled personnel; incorrect
assessments of the value of acquisitions or resource estimates; any
future inability to obtain additional funding, when required, on
acceptable terms or at all; credit risk; changes in legislation; any
unanticipated disputes or deficiencies related to title matters;
dependence on management and key personnel; and risks associated with
operating in and being part of a joint venture. Although the
forward-looking statements contained in this press release are based
upon factors and assumptions, which management of the Company believes
to be reasonable, the Company cannot assure that actual results will be
consistent with its expectations and assumptions. Material factors and
assumptions, which management of the Company has considered in
connection with making the forward-looking statements in this press
release, include that the Company will be able to successfully employ
its process of exploration methodology at its exploration wells and the
Kechoula structure. Undue reliance should not be placed on the
forward-looking statements contained in this news release as there can
be no assurance that the plans, intentions or expectations upon which
they are based will occur. These statements speak only as of the date
of this press release, and the Company does not undertake any
obligation to publicly update or revise any forward-looking statements
except as expressly required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy any securities of Longreach in any jurisdiction in
which such offer, solicitation or sale would be unlawful. The
securities referred to herein have not been and will not be registered
under the United States Securities Act of 1933 (the "U.S. Securities
Act") or any state securities laws and may not be offered or sold
within the United States or to U.S. Persons (as defined in the U.S.
Securities Act) unless registered under the U.S. Securities Act and
applicable state securities laws, or an exemption from such
registration is available.
SOURCE Longreach Oil and Gas Limited
