Gulfsands provided an update on operations in Syria.
Twaiba 1 Exploration Well Testing Operations
Testing operations are ongoing on the Twaiba-1 exploration well. Preliminary interpretation of drilling data and wire-line logs had identified two intervals within the regionally productive Cretaceous aged reservoir section, the "Massive" and "Shiranish" Formations, with potential oil accumulations.
Forward operations are to further plug back the lower portion of the tested interval that appears prone to water flow, and subsequently test the highest 5 meter section where the most significant hydrocarbon shows were detected. Chemical treatments will be applied over this short section in order to enhance the flow potential of the oil within the rock matrix.
The testing of the upper 5 meters of the Shiranish interval will be the subject of a further news release when results are available.
Abu Ghazal Exploration Well
The Abu Ghazal 1 well (AGZ-1) commenced drilling operations on 23rd January 2011 and is currently drilling ahead at a depth of approximately 922 meters. The AGZ-1 well has a planned total depth of 3800 meters and has multiple objectives, with primary reservoir targets in the Cretaceous aged "Massive" and Triassic aged "Butmah" and "Kurrachine Dolomite" Formations. The Abu Ghazal prospect, located approximately 30 kilometers south of the Khurbet East field, is one of the largest remaining un-drilled structures within Block 26. Recent remapping of the structure gives a P50 un-risked resource estimate of approximately 50 million barrels-of-oil-equivalent ("MMboe") for a combination of the Cretaceous "Massive" Formation and the deeper Triassic objectives.
This relatively deep exploration well is expected to take approximately 90 days to drill and evaluate. The current well cost estimate is approximately US $6.2 million before cost recovery, and Gulfsands has a 50% participating interest in the AGZ-1 well.
KHE-101 Appraisal Well
The KHE-101 appraisal well commenced drilling operations on 19th January 2011 and is currently drilling ahead at a depth of approximately 915 meters.
The KHE-101 well is planned to be drilled to a total depth of 3200 meters in order to provide information on the areal extent and volume of hydrocarbons and quality of the "Butmah" and "Kurrachine Dolomite" Triassic aged reservoirs that were found to be hydrocarbon bearing in the original Khurbet East field discovery well (KHE-1). Our current understanding provides a P50 resource of 44 bcf ("billion cubic feet") and a P10 resource of 236 bcf. Information gathered from this well, including production testing of both Triassic objectives will therefore be important in determining the potential for a future development of these Triassic reservoirs.
This appraisal well is expected to take approximately 90 days to drill, evaluate and test. The current well cost estimate is approximately US $8.2 million before cost recovery, and Gulfsands has a 50% participating interest in the KHE-101 well.
Ric Malcolm, Gulfsands CEO, said, "The production testing results at Twaiba at least so far, have been disappointing particularly in light of the substantial oil column that appears to be present. While the testing program is still ongoing, it is unlikely that we will achieve a commercial result from this well.
We look forward to the results of the first two wells in our 2011 drilling program, both of which have the potential to deliver significant value in a success case.
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