Xtract Energy has provided the following update on the operations of its Turkish joint venture Extrem Energy A.S. ('Extrem Energy').
Post Drill Evaluation of Sarikiz Field
Following the successful drilling of Sarikiz-2, which is about to be tested, a review was made of the drilling logs of the East Sarikiz-1 well previously drilled by Turkish state firm TPAO in 2001. TPAO tested the deeper interval 2,122-2,147m and found limited oil shows. The well was plugged and abandoned.
New log analysis conducted for Extrem Energy clearly shows oil indications within similar intervals to Sarikiz-2 across the depth range 1,414-1,766m. The well conditions at East Sarikiz are suitable for re-entry with Extrem now planning to conduct a further production test at the shallower interval later in 2009. If successful, East Sarikiz will be an additional producing well that will add to early revenues. The estimated drilling and testing investment to appraise the production potential of the well is US$0.75m.
The new log analysis also suggests that the Sarikiz field extends across a wider geographic area than previously interpreted. The estimated area of the fan-delta structure has increased to 6.0km2 (from 4.0km2 stated on 16 March 2009). Using an average thickness of
Sarikiz-2 Production Test
The drilling rig was mobilized to site on April 12 and rigging was completed on schedule on April 17, 2009. Preparatory work continues, but some delay has been experienced as the rig awaits delivery of certain production testing equipment. Production testing is now expected to commence on or before May 15, 2009. Extrem is not liable for the daily rig rate costs during the delay period.
The testing of the 12 levels of sandstone will take approximately one month. The daily production rate achieved will be used to determine
All operations are controlled and operated by Merty Energy, Xtract's joint venture partner in Extrem Energy.
Further progress updates will be provided as appropriate.
Xtract currently holds 20% of Extrem Energy and has the option of increasing its shareholding to 34% by contributing a further investment of US $3.5 million before June 30 ,2009.
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