Xtract Energy Plc is pleased to provide further details about the proposed exploration well to be drilled by its joint venture company Extrem Energy AS ("Extrem") on the Siraseki licence area in Turkey, together with an update on Extrem's activities in the Sarikiz field, where a discovery has already been made.
Well Programme - Menekselik-1 (Siraseki licence area)
The results from seismic and GORE geochemical surveys over the Siraseki licence (Extrem 100% interest) in the Adana basin were processed in 2009, giving rise to a new prospect called Menekselik-1.
The Adana basin is located on the eastern part of the Mediterranean Sea, off southern Turkey. It covers an area of more than 20,000km2, two thirds of which lies under the Mediterranean Sea. It is surrounded by the Taurus Mountains to the north, the Mut Basin to the west, and the Misis Uplift to the east. The first commercial oil discovery was made by Mobil in 1960 from the Miocene carbonates in the Bulgurdag field to the northwest of the basin. Since then several wells have been drilled in the area but no further commercial discovery has been made. Menekselik-1 aims to unlock the undiscovered potential of the basin.
Menekselik-1 is planned to target the Aslantis sandstones. The target structure is a fault bounded anticline with an estimated (P50) area of 14 square km and an expected net productive pay thickness of 30m. It is calculated to be found in the depth range between 1647-1703m. The planned total depth for the well is 2010m.
On reaching total depth, logging will be conducted in the 8 1/2'' hole section. Depending upon hydrocarbon shows and results of the wire-line log analysis, cased-hole testing may be carried out. If commercial quantities of hydrocarbons are interpreted to be present, 7" casing will be run from the surface to below the zones to be tested.
It is planned to use Merty Energy's PM-3000 rig for the work, in direct continuation from operations on the Alasehir licence (see below). On this basis, the spud date is likely to be during April 2010. Further updates will be provided as appropriate.
Based on an assumed net productive pay thickness of 30m, Extrem Energy's preliminary pre-drill P50 estimate of the recoverable hydrocarbons in place from the Menekselik-1 well is 3.8mbbl in an oil case. For the Menekselik field as a whole, the equivalent estimates are 28.8mbbl in an oil case or 94 billion cubic feet in a gas case. Recovery factors of 20% and 70% respectively have been applied.
Drilling Update - Sarikiz-3
The Sarikiz-3 well on the Alasehir licence area (Extrem 80%) was spudded on 10 January 2010. It is located approximately 525m away from previous discovery well Sarikiz-2. The planned total depth of the well is 1950m.
Drilling has proceeded more slowly than expected. Following completion of open-hole logs on the shallow section to 1308m on 22 February, casings were landed and cemented into position, with that operation completing on 28 February. As at 2 March, drilling operations had resumed, with a current depth of 1432m. The targeted Alasehir sandstones are expected to be encountered at depths between 1570m and 1850m. Depending upon hydrocarbon shows and the results of wire line log analysis, 7 inch casing will be run from the surface to below the target zones and cased-hole production testing will be carried out.
Based on a 2 square km area and an assumed net productive pay thickness of 20m, Extrem Energy's preliminary pre-drill P50 estimate of the recoverable oil in place from the Sarikiz-3 well is 5.75mbbl, based on an assumed 20% recovery factor. Further updates will be provided as appropriate.
Production Update - Sarikiz-2
As advised before, production from Sarikiz-2 began on 13 January 2010, with production based on natural flow rates until the installation of a down-hole production pump. The pump is planned to be installed by the Merty rig using a work-over operation to be conducted after completion of the drilling and testing operations at Sarikiz-3 (see above). Once the down-hole pump is installed, it is expected that production from Sarikiz-2 will reach approximately 350 bbl/day, in line with previous guidance.
An update on timing will be provided once it is clear how long current operations at Sarikiz-3 will take.
Alasehir/Sarikiz Field Development
The actual flow rate achieved during the extended test at Sarikiz-2 and the drilling results from Sarikiz-3 will do much to confirm the potential of the Sarikiz oil field.
In view of the high level of uncertainty over the possible extent of the oil-bearing structures in the wider Alasehir license area and in order to enhance planning of further wells after Sarikiz-3, Extrem continues to evaluate the cost/benefit of undertaking 3-D seismic over the license area. In the meantime, an in-fill programme of 2-D seismic has been agreed, which will help determine a location for follow-up well Sarikiz-4. It is possible that the location of Sarikiz-4 will be at a more significant distance (a few km) from the existing wells in order to help test the potential of the wider area. The two-step seismic approach should help optimise the selection of the geographic area to be covered by the 3-D project.
The information above relating to resource estimates has been provided using the SPE standards and includes the following terms: "mbbl" (million barrels); "P50" (mid-case scenario in relation to reserve expectations).
The above information has been reviewed and approved by Ongun Yoldemir, Managing Director of Extrem Energy, who has a masters degree in geological engineering and worked as an explorationist in the oil and gas sector in the Middle East, Kazakhstan, Azerbaijan, and North Sea, has over 28 years' experience in the resource and energy sector and is a member of the American Association of Petroleum Geologists, European Association of Geologists and Engineers, the Society of Exploration Geophysicists and several related Turkish institutions.
Xtract holds 50% of the equity of Extrem through a wholly owned subsidiary.