Fourth Consecutive Discovery in Hawler License Area
CALGARY, March 12, 2014 /CNW/ - Oryx Petroleum Corporation Limited ("Oryx Petroleum" or the "Corporation") today announces that the successful testing of the BAN-1 exploration well has confirmed the Corporation´s fourth consecutive oil discovery in the Hawler license area in the Kurdistan Region of Iraq. Oryx Petroleum is the operator and has a 65% participating and working interest in the Hawler license area.
Commenting today, Henry Legarre, Oryx Petroleum's Chief Operating Officer, stated:
"We are very pleased with the drilling and test results of the BAN-1 exploration well. We successfully flowed oil from the well´s primary targets in the Cretaceous and Lower Jurassic reservoirs. In addition, we encountered and flowed hydrocarbons to the surface in the Triassic Kurra Chine formation and established the presence of hydrocarbons in the Tertiary Pila Spi formation. Given the down-dip location of the well, these results underline the significant potential that exists up-dip of the BAN-1 well. We are now accelerating plans to drill an appraisal well targeting the crest of the Banan structure in order to better understand the full potential of this discovery."
Banan Exploration Well
The KS Discoverer 1 rig spudded the BAN-1 well, the Corporation's fourth exploration well in the Hawler license area, targeting the Banan prospect, in mid-September 2013 and reached total depth of 4,000 metres in the Kurra Chine formation. The BAN-1 well targeted oil potential in the Cretaceous, Upper and Lower Jurassic and the Triassic. Due to challenging control conditions experienced in the Triassic, where the well encountered and flowed hydrocarbons to surface, BAN-1 was plugged back to 3,400 metres in preparation for testing operations in the shallower Cretaceous and Jurassic formations.
The BAN-1 well was located down-dip of the crest of the Banan structure because the crest was outside the Hawler license area boundaries at the time of BAN-1 planning. The Corporation agreed to a boundary extension with the Kurdistan Regional Government in late 2012. 2D seismic data acquired in late 2013 covering the boundary extension area identified more clearly the likely crest of the Banan structure indicating that such crest is up-dip of the BAN-1 well.
Logging data, core analysis and observations during drilling in the Upper Cretaceous (Shiranish, Kometan and Upper Qamchuqa formations) confirmed the presence of hydrocarbons and similar matrix porosity as observed at Demir Dagh. Logging data and observations during drilling, including free oil on the shakers and cuttings, also confirmed the presence of hydrocarbons in the Tertiary (Pila Spi formation), Upper Jurassic (Najmah formation) and Lower Jurassic (Mus and Base Alan, Adaiyah, and Butmah formations).
Testing Program Results
Oryx Petroleum successfully flowed oil in two of six cased-hole drill stem tests ("DSTs") in BAN-1.
DST#1 conducted over a 106 metre interval in the Butmah formation in the Lower Jurassic successfully flowed naturally over a period of three days using a series of different choke sizes. The sustained flow rate achieved was 3,500 bbl/d of light oil for a 23 hour period using a 128/64" choke. No pressure decline was observed during the test. The crude oil from the Butmah formation was measured on site between 27° and 30° API gravity. Small quantities of natural gas and hydrogen sulfide were encountered.
The DST#6 conducted over a 123 metre interval in the Shiranish and Top Kometan formations in the Upper Cretaceous successfully flowed over a period of 42 hours using a series of different choke sizes. The sustained flow rate achieved was 820 bbl/d of oil for a 12 hour period using a 128/64" choke under natural flow. No pressure decline was observed during the test. The crude oil from the Shiranish and Top Kometan formations was measured on site between 15° and 21° API gravity. Small quantities of natural gas and hydrogen sulfide were encountered. The Corporation believes higher flow rates could be achieved using appropriate artificial lift.
The four other DSTs were conducted separately in the Middle Cretaceous (Kometan formation), Upper Jurassic (Najmah formation) and Lower Jurassic (Mus and Base Alan, and Adayiah formations). Logging results of each formation indicated the presence of hydrocarbons and a fracture network. During the tests small quantities of oil were produced from the Lower Alan and Mus formations, as well as 1,000 and 2,000 bbl/d of water. The Corporation believes the presence of water was due to the down-dip location of BAN-1. Importantly, the test results show the development of reservoirs that will be further appraised and tested by the planned BAN-2 well which will be located in a more crestal position.
All field fluid measurements will require laboratory analysis to confirm results and should be considered preliminary until such analysis has been done. The above test results are not necessarily indicative of long-term performance or of ultimate recovery.
NSAI Resources Estimates as of December 31, 2013
Prior to the start of the testing campaign, Netherland, Sewell & Associates, Inc. ("NSAI") estimated as of December 31, 2013 that the Banan discovery contains low, best and high estimates unrisked gross (100%) contingent oil resources of 5, 40 and 440 MMbbl, respectively, all in the Cretaceous formations, and best estimate unrisked gross (100%) prospective oil resources of 235 MMbbl (risked: 46 MMbbl) in the Tertiary Pila Spi formation, the Jurassic Alan, Mus, Adaiyah and Butmah formations, and the Triassic Kurra Chine formation. See "Reserves and Resources Advisory" below for additional information regarding these estimates.
Accelerated Appraisal Plan
Given the successful drilling and testing results of the BAN-1 well, the Corporation is accelerating its plans to drill an appraisal well targeting a more crestal location of the Banan structure. The Corporation believes significant up-dip potential exists in all formations. The up-dip potential in the Cretaceous formation is underscored by NSAI´s high estimate of contingent resources for Banan. The Corporation expects to spud BAN-2 in mid-2014.
ABOUT ORYX PETROLEUM CORPORATION LIMITED
Oryx Petroleum is an international oil exploration company focused in Africa and the Middle East. The Corporation's shares are listed on the Toronto Stock Exchange under the symbol "OXC". The Oryx Petroleum group of companies was founded in 2010 by The Addax and Oryx Group Limited and key members of the former senior management team of Addax Petroleum Corporation. Oryx Petroleum has interests in six license areas, two of which have yielded oil discoveries and four of which are prospective for oil. The Corporation is the operator or technical partner in four of the six license areas. Two license areas are located in the Kurdistan Region and the Wasit governorate (province) of Iraq and four license areas are located in West Africa in Nigeria, the AGC administrative area offshore Senegal and Guinea Bissau, and Congo (Brazzaville). Further information about Oryx Petroleum is available at www.oryxpetroleum.com or under Oryx Petroleum's profile at www.sedar.com.
Reader Advisory Regarding Forward-Looking Information
Certain statements in this news release constitute "forward-looking information", including statements related to the Corporation's reserves and resources estimates and potential, drilling plans, development plans and schedules and chance of success, results of exploration activities, future drilling of new wells, ultimate recoverability of current and long-term assets, possible commerciality of our projects, future expenditures, and statements that contain words such as "may", "will", "could", "should", "anticipate", "believe", "intend", "expect", "plan", "estimate", "potentially", "project", or the negative of such expressions and statements relating to matters that are not historical fact, constitute forward-looking information within the meaning of applicable Canadian securities legislation.
In addition, information and statements in this news release relating to reserves and resources are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. See "Reserves and Resources Advisory" below.
Although Oryx Petroleum believes these statements to be reasonable, the assumptions upon which they are based may prove to be incorrect. In making certain statements in this news release, Oryx Petroleum has made assumptions with respect to the following: the general continuance of the current or, where applicable, assumed industry conditions, forecasts of capital expenditures and the sources of financing thereof, timing and results of exploration activities, the Corporation's ability to obtain and retain qualified staff, contractors and personnel and equipment in a timely and cost-efficient manner, the political situation and stability in jurisdictions in which Oryx Petroleum has licenses, the ability to renew its licenses on attractive terms, the applicability of technologies for the recovery and production of the Corporation's oil reserves and resources, the amount, nature, timing and effects of capital expenditures, geological and engineering estimates in respect of the Corporation's reserves and resources, the geography of the areas in which the Corporation is conducting exploration and development activities, operating and other costs, and business strategies and plans of management.
Forward-looking information is subject to known and unknown risks and uncertainties which may cause actual results or events to differ materially from those anticipated in the forward-looking information and statements if the assumptions underlying them prove incorrect, or if one or more of the uncertainties or risks described below materializes. The risks and uncertainties affecting the Corporation include, but are not limited to, imprecision of reserves and resources estimates; ultimate recovery of reserves; ability to commercially develop its oil reserves and/or its prospective and contingent oil resources; commodity prices; general economic, market and business conditions; industry capacity; competitive action by other companies; refining and market margins; the ability to produce and transport crude oil and natural gas to markets; weather and climate conditions; results of exploration and development drilling and other related activities; fluctuation in interest rates and foreign currency exchange rates; ability of suppliers to meet commitments; actions by governmental authorities, including increases in taxes; decisions or approvals of administrative tribunals, renewal or granting of licenses; changes in environmental and other regulations; international political events; renegotiations of contracts; reliance on key managers and personnel; dry wells may lead to a downgrading of the Corporation's licenses or contracts or require further funds to continue exploration work; future foreign currency exchange rates; risks related to the actions and financial circumstances of our agents and contractors, counterparties and joint venture partners; political uncertainty, including actions by terrorists, insurgent or other groups, or other armed conflict, including conflict between states; and expected rates of return. More specifically, future production may be affected by exploration success, start-up timing and success, facility reliability, reservoir performance and natural decline rates, water handling and drilling progress, restrictions on ability to access necessary infrastructure, equipment and services, including but not limited to, those sourced from third party providers. Capital expenditures may be affected by cost pressures associated with new capital projects, including labour and material supply, project management, drilling rig rates and availability and seismic costs. Risk factors are discussed in greater detail in filings made by the Corporation with Canadian securities commissions.
Readers are strongly cautioned that the above list of factors affecting forward-looking information is not exhaustive. Although the Corporation believes that the expectations conveyed by the forward-looking information are reasonable based on information available to it on the date such forward-looking information was made, no assurances can be given as to future results, levels of activity and achievements. Readers should not place undue importance or reliance on the forward-looking information and should not rely on the forward-looking information as of any date other than the date hereof. Further, statements including forward-looking information are made as at the date they are given and, except as required by applicable law, Oryx Petroleum does not intend, and does not assume any obligation, to update any forward-looking information, whether as a result of new information or otherwise. If the Corporation does update one or more statements containing forward-looking information, it is not obligated to, and no inference should be drawn that it will make additional updates with respect thereto or with respect to other forward-looking information. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.
Reserves and Resources Advisory
Oryx Petroleum's reserves and resource estimates have been prepared and audited in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook.
Contingent oil resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent oil resources entail additional commercial risk than reserves and adjustments for commercial risks have not been incorporated in the summaries of contingent oil set forth in this news release. There is no certainty that it will be commercially viable to produce any portion of the contingent oil resources. Moreover, the volumes of contingent oil resources reported herein are sensitive to economic assumptions, including capital and operating costs and commodity pricing.
Prospective oil resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective oil resources have both a chance of discovery and a chance of development. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources.
Use of the word "gross" to qualify a reference to resources means, in respect of such resources, the total resources prior to the deductions specified in the production sharing contract. Reference to 100% indicates that the applicable resources are volumes attributed to the discovery as a whole and do not represent the company's working interest in such resources.
SOURCE: Oryx Petroleum Corporation Limited
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