Kulczyk Oil declared the results of an independent third party engineering evaluation of its resources in Syria by RPS Energy (RPS).
HIGHLIGHTS
•Prospective Resources (High Estimate) of 777 million barrels of oil equivalent ("MMBOE") for the Itheria prospect and 107 MMBOE for the Bashaer prospect were identified by RPS for the 100% interest in Syria Block 9;
•The net Prospective Resources (High Estimate) attributable to the 45% effective interest of KOV in Syria Block 9 are 350 MMBOE for Itheria and 48 MMBOE for Bashaer; Net Prospective Resources (High Estimate) are approximately 370% higher than the previous independent third party estimates;
•Prospective Resources (Best Estimate), net to the 45% effective interest of KOV, of 135 million barrels of oil and 101 billion cubic feet of gas for a total of 152 MMBOE at Itheria and 20 million barrels of oil and 8 billion cubic feet for a total of 21 MMBOE at Bashaer;
• KOV plans to spud the Itheria-1 well before the end of the second quarter.
The Company currently holds a participating interest of 100% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon fulfillment of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometer (2.48 million acre) area in northwest Syria. The Company has agreements to assign an aggregate of 55% in ownership interests to third parties which are subject to the approval of Syrian authorities, and which, when approved, would leave the Company with a remaining effective interest of 45% in Block 9.
Geological evaluation and the interpretation of a 420 km2 3D seismic survey acquired by Kulczyk Oil over the southeastern part of Block 9 in 2010 led to the identification of the Itheria and Bashaer Prospects and an improved understanding of the subsurface.
The Company retained RPS to evaluate the resources underlying Syria Block 9 as at December 31, 2010. The evaluation was conducted using the guidelines of the Canadian Oil and Gas Evaluation Handbook and consistent with the reporting requirements listed in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators.
Itheria prospect - Prospective Resource volumes for the 100% interest in Block 9 in the Itheria prospect were estimated by RPS at an un-risked Best Estimate of 299 million barrels of oil ("MMBO") and 225 billion cubic feet ("BCF") of solution gas for a total of 337 MMBOE. For the 45% interest of Kulczyk Oil, the corresponding volumes are 135 MMBO, 101 BCF and 152 MMBOE.
Bashaer prospect - Prospective Resource volumes for the 100% interest in Block 9 in the Bashaer prospect were estimated by RPS at an un-risked Best Estimate of 44 MMBO and 17 BCF of solution gas for a total of 47 MMBOE. For the 45% interest of Kulczyk Oil, the corresponding volumes are 20 MMBO, 8 BCF and 21 MMBOE.
The planned total depth of Itheria-1 is 3,200 meters and estimated drilling time is 66 days. The well will evaluate a four-way dip closure and is expected to spud in June, 2011. The Company plans to move the drilling rig from the Itheria-1 to the second well in the 2011 program, Bashaer-1, shortly after completion of drilling operations on Itheria-1. The Bashaer-1 well has a planned total depth of 2,600 meters at a location approximately 10 kilometres northwest of Itheria-1.
"The Itheria-1 well will test a structure with potential for world-class hydrocarbon volumes as indicated in the evaluation report of RPS. We look forward to drilling Itheria-1, the first well operated by the Company in Syria" said Jock Graham, Executive Vice President of Kulczyk Oil.
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Kulczyk Oil Ventures
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