Mira Resources and its wholly owned subsidiary Equinox TSB Development (Nigeria) Limited provide the following operational update on the ongoing testing program for Tom Shot Bank 1 well ("TSB 1").
Mira successfully perforated and is currently production testing from the Lower U 7 Interval from 6614 feet to 6734 feet, and is currently flowing 41.6 API gravity sweet oil with no presence of formation water. At the completion of the U 7 production test, Mira will test the U 4 Interval which has been interpreted to contain 42 feet of gas and a 12 foot oil leg. Mira will release the results of the production tests as they become available.
Thomas Cavanagh, President of Mira stated, "We are pleased that the perforation operation in the lower U 7 interval went exactly as planned. The lower U 7 required several days to clean up indicating reservoir damage however is now flowing 41.6 API oil with no signs of formation water. Final rates will be announced at the conclusion of the testing.
"We are very pleased to confirm that the light oils produced in these tests are an identical gravity and GOR to the oils recovered in the Cross River 2 well approximately 4 km to the east, which production tested in significantly thinner but virgin, undamaged reservoirs at rates in excess of 1400 BOPD. Further analysis with the newly acquired data is currently underway by an independent contractor to determine if as suggested by the seismic amplitude extractions, this is a continuous accumulation of hydrocarbons. The question of gross to net reservoir and deliverability was an identified issue however, the significant increase in gross oil encountered over the previous interpretation should significantly increase Mira's resource assessment as reported in its 51-101 Report. Due to the apparent significant damage to the near bore hole reservoirs within the U 7 reservoir at TSB 1, the upper 60 foot planned test in the U 7 reservoir has been postponed after consultation with our consultants.
"The U 4 reservoir which has an interpreted large gas cap and an oil leg is our next test. We plan to monetize the significant gas resources through the emerging gas policy in Eastern Nigeria with a portion of this, used as gas lift for the U 7 reservoir if required."
The lower reservoirs the U 9 and the U 8 will be evaluated in a new well (TSB 3) where modern drilling techniques minimize the risk of near bore hole reservoir damage and may be evaluated with the appropriate high resolution open hole logs that have the resolution to evaluate thin bedded reservoirs.
TSB Field is located within Oil Prospecting License 276 ("OPL 276") which is adjacent to the Abana Field in Oil Mining License 114 and due north of Addax Petroleum Corp. in Oil Mining License 123 ("OML 123"). Addax Petroleum Corp. is producing almost 50,000 BOPD from multiple fields within OML 123. TSB Field was discovered by Shell Petroleum in 1980 and encountered 425 Gross Feet of hydrocarbon pay, 57 net feet of gas and 83 net feet of oil proven pay with another possible 111 net feet of oil and 29 net feet of gas pay in reservoirs which Shell Petroleum interpreted as probable laminated reservoirs.
Mira also announces a $5 million convertible debt financing. Members of Mira management will provide a credit facility of up to $5 million to be expended on completion of the re-entry program currently under way on Mira's TSB 1 Well including extended production testing and for working capital. The loan will be for a one year term and will bear interest at 12% per annum. Funds which are advanced are convertible into common shares of Mira at the option of Mira at any time prior to maturity of the loan. In the event of conversion, the outstanding principal sum will be converted into common shares of Mira at a price per share which is equal to 95% of the weighted average trading price of Mira's common shares on the TSX Venture Exchange for the 20 trading days preceding the date of conversion.
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