Successful Commissioning of Production at Demir

Source: www.gulfoilandgas.com 6/18/2014, Location: Middle East

Oryx Petroleum Corporation Limited announces that it has successfully tested and commissioned the first phase of its production facilities at the Demir Dagh field 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.

Highlights:
Initial Production Facilities Tested and Commissioned
- Initial oil production capacity of approximately 5,000 bbl/d with first production coming from the Demir Dagh-2 well
- Production facilities tested at 3,500 bbl/d and oil in storage awaiting first sales
- Truck Loading Station capable of handling 20,000 bbl/d

First Sales Expected This Week
- Kurdistan Region Government has been notified of readiness to produce and has authorised sales to proceed
- Crude oil to be sold to a third party marketer for distribution in domestic market
- Initial sales price of just below $60 per barrel

Development Plans and Production Guidance
- Oil production is expected to commence at rates below the initial oil production capacity and steadily increase thereafter
- Production facilities capacity anticipated to be increased throughout 2014 and 2015 reaching 25,000 bbl/d by Q4 2014 and 40,000 bbl/d in 2015
- 1.2 kilometre 16” connecting line to Khurmala-Faysh Khabur export pipeline expected to be completed in the second half of 2014

Commenting today, Henry Legarre, Oryx Petroleum’s Chief Operating Officer, stated:
“We are very pleased that we are now in a position to commence first production and sales. To achieve first production and sales approximately 15 months after discovery is a major accomplishment and required an enormous effort from all involved. But first production is just the beginning as we will continue with an aggressive expansion of our production and facilities capacity throughout the year. Notwithstanding recent events in Northern Iraq outside of the Kurdistan Region we have been able to continue to work throughout the Hawler license area without major interruptions albeit with increased security measures in place.”

First Phase of Production Facilities Commissioned
The construction of the first phase of the production facilities and associated infrastructure at the Demir Dagh field has been completed and the facilities tested and commissioned. Initial production capacity will be approximately 5,000 bbl/d with oil coming from the DD-2 well. Initial storage capacity is 25,000 bbl and the Truck Loading Station has one of three planned gantries installed and is able to accommodate up to 20,000 bbl/d. The DD-2 well and the facilities were tested together at 3,500 bbl/d and oil is in storage awaiting the commencement of sales.

First Sales
The Corporation expects first sales to commence within days. Oryx Petroleum notified the Ministry of Natural Resources of the Kurdistan Regional Government (“MNR”) of the Corporation´s readiness for first sales from Demir Dagh and the MNR has formally authorised sales to proceed. Oryx Petroleum has agreed to sell crude oil to a third party marketer designated by the MNR. The crude oil will be sold to the third party marketer at a price of just below $60 per barrel as determined by the MNR reflecting local market pricing dynamics and the medium sweet quality of the crude produced at Demir Dagh. The Corporation expects the agreement to be renewed at the end of its term consistent with domestic sales practices in Kurdistan.

Expansion of Production and Facilities Capacity Throughout 2014 and 2015
Both wellhead production capacity and facilities capacity are expected to be increased throughout the remainder of 2014 and early 2015. The successfully completed DD-3 and DD-4 wells are expected to be tied-in to the production facilities over the next few months and DD-6 and four additional development wells are expected to be drilled prior to year end. Facilities will be expanded to accommodate expected increases in wellhead production capacity. Gross production is expected to reach 25,000 bbl/d by the end of 2014 and 40,000 bbl/d in 2015 as anticipated wellhead capacity increases and the early production facilities are built to full capacity. Associated storage capacity is also expected to be increased to 90,000 bbl and the capacity of the Truck Loading Station is expected to be increased to 60,000 bbl/d.

Upon successful completion of the remainder of the Demir Dagh appraisal program, the Corporation plans to build a Permanent Production Facility (“PPF”) with initial gross (100%) oil production capacity of 100,000 bbl/d. The Corporation plans to continuously drill development wells to increase production capacity in preparation for the commissioning of the PPF in 2016.

Connecting Pipeline to Khurmala - Faysh Khabur export pipeline
Oryx Petroleum is currently planning to construct a 1.2 kilometre 16” pipeline connecting the Demir Dagh production facilities to the Khurmala-Faysh Khabur international export pipeline. The tender process for this project has commenced with construction and completion expected in the second half of 2014.

For more information about related Opportunities and Key Players visit Iraq Oil and Gas Projects


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