Eureka Encounters Oil Shows at Koyunlu-1 in Turkey

Eureka reports that the Koyunlu-1 well, located onshore South Eastern Turkey, had reached a depth of 1,252 meters. Since November 27th, casing was run and cemented at 1,215 meters and 32 meters were drilled to present depth of 1,252 meters.

Oil shows continued over the 32 meters in fractured carbonates of the target Garzan Formation, to the present depth of 1,252 meters. The shows were represented by bright yellow streaming cut fluorescence in drill cuttings and small quantities of crude oil were recovered during drilling as films floating on drilling fluid in the drilling fluid tanks. The shows were accompanied by total gas of about 7% over the interval 1,223 meters to 1,252 meters.

While the shows are encouraging their commercial significance will not be known until wire-line logs are run and interpreted and production testing, if warranted, has been carried out.

The well is presently waiting on delivery of well tubulars and operations are not expected to resume until 10 December.

Proposed total depth is 1,380 meters (4,530 feet).

Eureka has acquired farm-in rights to earn a 20% interest together with an option to increase its interest to 45%, in two exploration licenses in South Eastern Turkey. The Koyunlu-1 well is the first of two farm-in wells planned to be drilled in the licenses. The licenses are owned by Arar Oil and Gas Inc, a Turkish exploration and production company and drilling and oilfield operations group, with offices in Ankara Turkey and Houston Texas. Arar is the operator of the well and is also the drilling contractor under a turnkey (fixed cost) drilling contract with Eureka.

The well is located approximately 17 kilometers south of the West Raman oil field (original oil in place 1.5 billion barrels) in the major oil producing region of South East Turkey.

The Koyunlu-1 will test the eastern portion of a structure with similarities to the Raman field structures. The target reservoirs are Cretaceous age carbonates of the Garzan Formation and the underlying Cretaceous age carbonates of the Mardin Group, the same reservoirs which host oil in the Raman fields and numerous other oil fields in the region.

The structure has the potential to host recoverable reserves of between 2 million barrels and 204 million barrels (31 million barrels P50) if oil is present and is commercially extractable.