Xtract Provides Drilling Update for Sarikiz-2, Ups Oil-in-Place Estimates
Further to the announcement made on December 9, 2008, Xtract provides the following results for the Sarikiz-2 well in Turkey which was recently drilled on behalf of Extrem Energy A.S. ('Extrem Energy'). Please also refer to the pre-drill estimates which were announced by the Company on September 16, 2008.
Following the completion of the logging procedures, 23 levels of sandstone were determined to have producible oil with thicknesses between 1m and 12m. Of these, 12 levels with a combined reservoir thickness of 75m will be tested during flow tests and trial production now scheduled for April 2009. The total reservoir
thickness encountered greatly exceeded the pre-drill estimate of 10m or more and therefore underpins a significant increase in the estimated oil in place.
Based only on the producible area from the well at 0.3 km2, the oil in place is estimated (P50) to be 16.5mbbl.
With the expected recovery factor upgraded from 20% to 35% and permeability also upgraded to 10-80md from pre-drill estimates, the recoverable oil in place from the single well is now estimated to be 5.8mbbl. If repeated across the estimated 2.0km2 of the Sarikiz field, the total oil in place would be 110mbbl, compared with the
pre-drill estimate of 16mbbl, and the corresponding total estimated recoverable oil from the 2.0km2 field would be 38mbbl.
Following the successful drilling campaign, Extrem Energy intends to conduct test production in April 2009. To test the 12 levels will take approximately one month. During the early part of 2009, field development plans and engineering designs for the surface facilities for production will be prepared. Production from the well is expected to be at least 500b/d. Laboratory reports on the quality of the oil are pending, so estimates remain in accordance with pre-drill estimates of between 31 and 37 API oil.
Extrem Energy holds an 80% economic interest in the licence. The remaining 20% is held by Petrako Petrol Gas and Industrial Co. 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 2009. Xtract's net interest in Sarikiz-2 is therefore currently 16%, rising to 27.2% if the option is exercised.
All operations are controlled and operated by Merty Energy, Xtract's joint venture partner in Extrem Energy.
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