Vast Exploration Inc.

Vast Exploration Inc.

January 18, 2010 07:29 ET

Vast Exploration Inc.-Provides Initial Resource Assessment for the Qara Dagh Block in the Kurdistan Region of Iraq

CALGARY, ALBERTA--(Marketwire - Jan. 18, 2010) - Vast Exploration Inc. ("Vast" or the "Company") (TSX VENTURE:VST) is pleased to announce that AJM Petroleum Consultants ("AJM") has completed an independent, initial resource assessment of the Company's Qara Dagh Block, in the Kurdistan Region of Iraq. AJM has estimated an unrisked "Best Estimate" of 2.7 billion barrels of Petroleum Initially in Place as of December 31, 2009.

Ahmed Said, President and CEO, stated, "The independent assessment reaffirms management's estimates of the significant reserve potential on the block. Recent substantial discoveries in adjacent blocks have demonstrated the prolific nature of this region. The Company is entering an exciting phase as it prepares to spud its first exploration well in March 2010 targeting multiple reservoir horizons."

The chart below sets out the gross volume estimates, as prepared by AJM.

PIIP and Prospective Resources (Unrisked)(1)(6)(7)(8)
Qara Dagh Block
As of December 31, 2009
  Oil (millions of Barrels)
  Low Best High Mean
Category Estimate Estimate Estimate Estimate
  P90(2) P50(3) P10(4) Pmean(5)
Petroleum Initially in Place 1,674 2,742 4,896 3,129
Prospective Gross 269 450 849 526
Ultimate Recovery        


  1. These are the gross volumes estimated for the Qara Dagh Block, without any adjustments for working interest or encumbrances. The company holds a 37% interest in this resource accumulation.
  2. Low Estimate is considered to be a conservative estimate of the quantity that will actually be recovered. P90 means that there is a 90-percent chance that an estimated quantity, such as a prospective resources volume or associated value, will be equalled or exceeded.
  3. Best Estimate is considered to be the best estimate of the quantity that actually will be recovered. P50 means that there is a 50-percent chance or that it is equally likely that the actual remaining quantities recovered or associated value will be greater or less than the best estimate.
  4. High Estimate is considered to be an optimistic estimate of the quantity that will be recovered. P10 means that there is a 10-percent chance that an estimated quantity, such as a prospective resource volume or associated value, will be equalled or exceeded.
  5. Mean Estimate is the average from the probabilistic assessment.
  6. While the above quantities have not been adjusted for risk, AJM has assigned reserves to 7 formations. The Cretaceous which currently contains 3 target reservoirs has been estimated to have an average chance of success of 30%. The Jurassic currently contains 3 target reservoirs and has been estimated to have an average success chance of 21% and the Triassic has 1 target reservoir with an estimated chance of success of 17%.
  7. Undiscovered petroleum and prospective resources were estimated for the main Qara Dagh structure, which consists of the Sagirma and Qara Dagh areas, and the Golan structure. These estimates have been combined in the above table.
  8. The resource estimate was prepared in accordance NI 51-101 and the COGE Handbook.

Prospective resources are those resources of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. The chance of commerciality is the product of these two risk components. There is no certainty that any portion of the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources.

Prospective oil resources are undiscovered resources that indicate exploration opportunities and development potential in the event a commercial discovery is made and should not be construed as reserves or contingent resources.

The Qara Dagh Block

Vast Exploration has a 37% interest in the Qara Dagh Block. The Company obtained a 27% interest pursuant to a production sharing contract signed in 2008 with the Kurdistan Regional Government and holds an additional 10% interest in the Qara Dagh block subject to the issue of 60,000,000 Vast common shares in accordance with the directions of the Kurdistan Regional Government. A 354 kilometer 2D seismic program was completed in June 2009 and plans have been finalized to spud the first exploration well in March 2010. The block covers 846 square kilometers and has a large linear surface anticline, which is on a similar trend as the existing oil fields in northern Iraq and the more recent discoveries in Kurdistan at TaqTaq and Miran. Data processing and interpretations have been completed and integrated with regional and surface geological models. Three main prospects, which correspond to the three domes on the surface structure, have been confirmed by seismic mapping.

The Qara Dagh Block is located in the prolific Zagros foldbelt which extends from southern Turkey across northern Iraq and into southwest Iran. Large anticlinal structures, which formed during collision and formation of the Zagros Mountains, contain giant and supergiant accumulations of oil. The large surface structure on the block is known as Qara Dagh Mountain ("Black Mountain" in Kurdish) and is a prominent anticline which rises as high as 600 meters above adjacent valley floors. This 65 kilometer by 5 kilometer feature has steeply dipping limbs and an exhumed central valley which exposes progressively older stratigraphy towards the anticlinal core. The Eocene and Paleocene Pila Spi, Gercus and Sinjar formations of lower Tertiary age extend along the interior slopes of the mountain and the central valley is covered by the Paleocene Kolosh shale.

The subsurface structure is characterized by a large thrust fault, which extends along the length of the southern limb of the surface anticline, and a large fault bend fold in the overthrust section which is comprised of Cretaceous, Jurassic and Triassic strata.

There has been no prior oil exploration on the Qara Dagh Block and the entire Kurdish area of northern Iraq was virtually unexplored until the Kurdish Regional Government issued new exploration contracts in 2007. To the southwest, the supergiant Kirkuk Field was among the first discoveries in Iraq. Kirkuk and other major fields such as Bai Hassn, Jambur and Kor Mor produce mainly from Tertiary reservoirs; however, to the northeast these formations lose prospectivity as intense deformation has caused the Tertiary formations to be exposed on the land surface. This deformation has resulted in highly fractureds subsurface structures formed by the deeper Mesozoic formations. As a result, the main reservoirs at TaqTaq and Miran are formed by the Cretaceous Shiranish, Kometan and Qamchuqa Formations.

Extrapolation from nearby oil fields, recent discoveries and the seismic interpretations indicate seven potential reservoirs on the Qara Dagh structure. Fractured carbonates in the Cretaceous Shiranish, Kometan and Qamchuqa/Balambo Formations are prospective under the Kolosh shale seal and above a rich oil source rock in the Sarmord Formation. The Jurassic Alan, Mus and Butmah Formations are sealed by upper Jurassic anhydrite and charged by the Sargelu Shale which forms a regional oil source rock. Few wells have been drilled into the Triassic; however, the Kurra Chine is productive elsewhere in Iraq and could contain oil or liquids-rich gas at Qara Dagh.

The Company believes that proximity of the Qara Dagh Block to recent discoveries at TaqTaq and Miran and the presence of oil seepages on the block make the Qara Dagh structure a low risk prospect with the potential for the discovery of large oil reserves. 

About Vast Exploration Inc.

Vast Exploration Inc. is an independent oil and gas company. Vast is focused on the exploration and development of its principal asset, the Qara Dagh Block, in the Kurdistan region of Iraq. The Qara Dagh Block lies on trend with existing discoveries and is located in the prolific Zagros Fold Belt of Northern Iraq which contains several large fields including the super-giant Kirkuk field.

Regulatory Statements

This press release contains "forward looking information" within the meaning of applicable Canadian securities legislation. Forward looking information includes, but is not limited to, statements with respect to the estimated resource assessment, the prospective nature of the Block, exploration and development plans and projected expenses, receipt of government approvals, and relationships with other companies who hold an interest in the Qara Dagh block. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Resource estimates are based on assumptions and parameters agreed upon, and considered reasonable, by the management of the Company, AJM and the other companies with interests in the Block. Statements regarding timetable of future exploration of the Block are based on the plans set by the companies with interests in the Blocks. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. For a description of some of such risks, please see the Company's annual information form filed under the profile of the Company on SEDAR. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.


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