Transmeridian's South Alibek #1 Well Confirms Discovery
Transmeridian Exploration reports that the early testing results from its South Alibek #1 (SA-1) appraisal well confirms the discovery of oil. The first of 4 reservoir zones was perforated last week and was tested over several days at a stabilized rate of 570 barrels (90 cubic meters) of oil per day through a 12mm choke at a flowing tubing pressure of 290 psi. "Bearing in mind the early nature of the results, the news is extremely significant to the Company and shareholders," commented Lorrie T. Oliver, chief executive officer and chairman of the board. "We promised an oil well, and it is now being delivered. There is a great deal more work ahead of us, but a major milestone is achieved. This well has not only confirmed the geology but is also a major leap towards establishing a revenue stream for the company. We remain focused on the timely completion of our seven well drilling program and establishing sufficient revenue from this initial phase to become self-funding for the remainder of the field development. Additional news toward this effort is forthcoming."
The SA-1 reached a total depth of 12,435 feet (3,790 meters) and encountered an estimated 531 feet (162 meters) of net oil pay in the KTII and KTI carbonates. The first KTII interval tested was perforated over a gross reservoir thickness of 200 feet (59 meters) with 150 feet (46 meters) of perforations. The well was drilled in a crestal position of the field, half a mile (900 meters) updip of well #29, and is expected to result in a significant increase in Proved Reserves for the Company.
The initial test production will be trucked from our temporary test tank battery to a nearby rail terminal for sale to local refineries. The well is now shut-in in order to move the drilling rig to the next appraisal location, South Alibek #2 (SA-2), approximately 1.5 miles (2.35 km) northwest of SA-1 for another crestal test of this potentially significant oil field. Spudding of the well is planned for the end of July. A completion rig will be moved to SA-1 for resumption of the testing program in June. During the time between testing, further improvements will also be made to the oil facilities.
The resumption of testing is planned with several objectives. Three additional reservoir intervals are planned to be tested over a gross interval of 242 feet (74 meters) and additional completion work includes remedial acid jobs on the carbonates to improve productivity, and possibly acid fracs for additional reservoir stimulation. "To date, the data obtained from the testing has not been evaluated and more work is required to fully evaluate the reservoirs productivity, so it is premature to elaborate further on the test at this time," commented Bruce Falkenstein, vice president Exploration & Geology. "We have an extensive testing program planned which can take several months to complete. Common to fields in the area is invasion of the reservoirs by the drilling mud, which the log data and this simple completion and preliminary test result supports. The standard practice of matrix acidizing and mud wash has met with success in nearby wells, and will be applied once testing resumes. Our expectation, based on current engineering estimates, available technology and historical results, is that significantly higher sustainable rates can be obtained after the work is completed."
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