WesternZagros releases results from Kurdamir-1 audWesternZagros releases results from Kurdamir-1 audit
2009-11-26 07:51 ET - News Release
Mr. Greg Stevenson reports
WESTERNZAGROS ANNOUNCES FIRST CONTINGENT RESOURCES FROM KURDAMIR-1
Sproule International Ltd. has completed an independent auditwhich confirms WesternZagros Resources Ltd.'s best estimate contingentresources of 523 billion cubic feet of natural gas and 21 millionbarrels of condensate from the Tertiary interval of the Kurdamir-1 wellas of Nov. 23, 2009. Sproule has also confirmed additional prospectiveresources of either oil or gas from this Tertiary interval. Theseresource estimates do not include any assessments for the deeperCretaceous reservoir targets yet to be drilled. WesternZagros iscurrently widening the existing wellbore at the Kurdamir-1 well inpreparation to set the 9-5/8-inch casing at approximately 2,700 metres,prior to drilling into the Cretaceous reservoir targets.
"Whilewe still have more work to do on this well and on our longer-termdrilling program, this confirmation of a significant hydrocarbonaccumulation is an important milestone for WesternZagros," said SimonHatfield, WesternZagros's chief executive officer. "Finding theworld-class Oligocene reservoir present on our block is good news. Wedrilled 168 metres of it at Kurdamir-1 and achieved high test rates inboth of our drill stem tests. We look forward to the possibility ofdiscovering significant quantities of oil, both in the deeperCretaceous targets and on the flanks of the Kurdamir structure."
WesternZagros'sestimated range of discovered gas initially in place is from 635billion cubic feet to 1,098 billion cubic feet and the estimated rangeof gross unrisked contingent resources is from 379 billion cubic feetto 696 billion cubic feet of gas and from 13 million barrels to 32million barrels of condensate. The discovered gas initially in placeand the contingent resources estimates were assigned across the crestof the Kurdamir structure down to a depth of 2,312 metres, which is thelowest known gas in the Kurdamir-1 wellbore as determined by wirelinelogs. These estimates do not include any potential in theas-yet-undrilled downdip flanks of the Kurdamir structure in theTertiary reservoir deeper than 2,312 metres. This undrilled potentialis classified as undiscovered prospective resource, and was alsoconfirmed in the Sproule report.
The Kurdamir-1 well encounteredno porous reservoir below 2,312 metres. It is therefore uncertainwhether the gas and condensate encountered is associated with otherprospective resources. The gas and condensate may be in a gas capassociated with a deeper oil column downdip on the flanks of thestructure; it may be in a non-associated accumulation with a deeper gasand condensate column downdip on the flanks of the structure (withoutany downdip oil column); or it may be in association with a watercolumn; or it may be in association with any combination of these.Additional information, likely to be obtained by drilling a well on theflank of the structure, will be required to confirm the existence ofthese prospective resources, and if present, whether they are gas andcondensate, oil or a combination of both.
If the Tertiaryreservoirs below 2,312 metres on the flank of the Kurdamir structurecontain gas and condensate only, WesternZagros's estimated range ofundiscovered gas initially in place is from 371 billion cubic feet to1,032 billion cubic feet and the estimated range of gross unriskedprospective resources is from 180 billion cubic feet to 609 billioncubic feet of gas and from eight million barrels to 25 million barrelsof condensate.
Alternatively, if the Tertiary reservoirs below2,312 metres on the flank of the structure contain oil only,WesternZagros's estimated range is from 164 million barrels to 508million barrels of gross undiscovered oil initially in place and from32 million barrels to 207 million barrels of gross unrisked prospectiveoil resources (recoverable).
These prospective resources, whethergas and condensate or oil, would be in addition to any hydrocarbonsthat may be discovered in the deeper Cretaceous reservoir targets yetto be drilled.
Sproule carried out its audit in accordance withthe standards established by the Canadian securities administrators inNational Instrument 51-101 standards of disclosure for oil and gasactivities. Those standards require that prospective resource estimatesare prepared in accordance with the Canadian Oil and Gas EvaluationHandbook (COGE handbook). In Sproule's opinion, WesternZagros'sestimates were determined in accordance with industry practice and theguidelines and definitions contained in the COGE handbook.
The estimated contingent and prospective resources for Kurdamir-1 are expressed in the attached tables as a range of estimates.
KURDAMIR-1 TERTIARY GROSS UNRISKED DISCOVERED AND CONTINGENT RESOURCES
Low estimate Best estimate High estimate Mean
P90 P50 P10 estimate
Gas and condensate
(as of Nov. 23, 2009)
Gas initially
in place 635 847 1,098 856
Gas contingent
resources
(billion cubic feet) 379 523 696 532
Condensate contingent
resources
(million barrels) 13 21 32 22
KURDAMIR-1 TERTIARY GROSS UNRISKED UNDISCOVERED AND PROSPECTIVE
RESOURCES IF GAS AND CONDENSATE ONLY
(as of Nov. 23, 2009)
Low estimate Best estimate High estimate Mean
P90 P50 P10 estimate
Undiscovered gas
initially in place 371 692 1,032 699
Gas prospective
resources
(billion cubic feet) 180 363 609 381
Condensate prospective
resources
(million barrels) 8 15 25 16
KURDAMIR-1 TERTIARY GROSS UNRISKED UNDISCOVERED AND PROSPECTIVE
RESOURCES IF OIL ONLY
(as of Nov. 23, 2009)
Low estimate Best estimate High estimate Mean
P90 P50 P10 estimate
Undiscovered oil
initially in place
(million barrels) 164 328 508 333
Gross unrisked
prospective
resources
oil (million
barrels) 32 100 207 112
WesternZagros will work with its co-venturers, theKurdistan regional government and Talisman Energy Inc., to evaluate thecommercial potential and technical feasibility of the gas andcondensate discovered to date at Kurdamir-1, together with anyadditional discoveries yet to be made. Beyond this contingency, nofederal Iraq legislation has been agreed to or enacted to address thefuture organization of Iraq's petroleum industry or the sharing ofpetroleum and other revenues within Iraq. Failure to enact legislation(or the enactment of federal legislation contradictory to Kurdistanregion legislation) could materially adversely impact WesternZagros'sinterest in the Kurdistan region and the PSC.
This resourcedisclosure coincides with the filing on SEDAR of a material changereport, which includes the following additional information: the risksand level of uncertainty associated with the discovery and recovery ofthe resources, the risks and uncertainties relating to the developmentof any discovered resources, and the significant positive and negativefactors relevant to the estimates.
We seek Safe Harbor.