Terrific news for WZR shareholders. This was supposed to be the poorest quality of all zones targeted and yet it has provided a significant increase in volumes and flow rates based on previous expectations. The high quality api (38) is also a surprise.
This certainly bodes well for the 2 remaining tests which WZR have high hopes for.
With a 40% interest, this really is very good news for future valuation upgrades.
Thesharehub initiated coverage on WZR at 115 cents on Nov 9th with a target of 220 cents. See previous post here.
19th November 2012 – 12.15pm gmt, Westernzagros Resources Ltd.(WZR)
WesternZagros Exceeds Expectations from First Cased Hole Test in Kurdamir-2 Oligocene.
WesternZagros Resources Ltd. (TSX VENTURE:WZR) (“WesternZagros” or “the Company”) has successfully completed the first of three planned cased-hole tests in the Oligocene Formation of the Kurdamir-2 well in the Kurdistan Region of Iraq.
Flow rates of up to 3,450 barrels per day (“bbl/d”) of light oil were achieved from the 20 metre perforated interval, the deepest of the planned Oligocene tests. The Company now interprets the Oligocene oil leg encountered in this well to be 146 metres minimum thickness (previously interpreted to be 118 metres). WesternZagros expects that its contingent resources estimate will increase significantly as a result of this test.
Simon Hatfield, WesternZagros’s Chief Executive Officer commented,
“This first cased-hole test result far exceeded our expectations from what we consider to be the poorest quality portion of the reservoir. The primary objective of testing this deepest interval was to establish lowest known oil. We now look forward to determining the flow rate from the two additional tests in the main zone of the increasingly promising Oligocene reservoir.”
The cased-hole test was conducted over a perforated interval of 20 metres of fractured reservoir below the main porous zone of the Oligocene.
The maximum flow rate of 3,450 bbl/d of light oil and 8.8 mmcf/d of natural gas was reached after flowing and stabilizing the well for two days at progressively larger choke sizes. The final rate was achieved on a 72/64″ choke with a wellhead flowing pressure of 810 psi. The oil was high quality 38 degree API and no formation water was detected.
The Company’s expectation of an increase in its contingent resources is based on the now proven lowest known oil in the Kurdamir-2 well at 2,590 metres, 28 metres deeper than reported following the initial open-hole test conducted in March 2012.
The test results also validate that the prospective resources contained in the Oligocene extend still further down the structure; and this will be further evaluated in the upcoming Kurdamir-3 well to be drilled once current operations on Kurdamir-2 are completed.
The operator, Talisman (Block K44) B.V. (“Talisman”) will continue the testing program of two additional Oligocene intervals at Kurdamir-2. Upon completion of the testing program, test and wire log data will be analyzed and the Company will release an updated resource estimate for the Oligocene once confirmed by its independent auditors.
WesternZagros and Talisman each have a 40 percent working interest in the Kurdamir Block with the Kurdistan Regional Government (“KRG”) holding the remaining 20 percent.