Marsa Energy Inc.
TSX VENTURE : MEP

January 07, 2015 10:19 ET

Marsa Energy Inc. Announces Significant New Field Discovery, Reserves and Provides Drilling Update

CALGARY, ALBERTA--(Marketwired - Jan. 7, 2015) - Marsa Energy Inc. ("Marsa" or the "Company") (TSX VENTURE:MEP) is pleased to announce the results of an independent reserves and economic evaluation of the Company's Poyraz Ridge field in the Ortakoy Block by DeGolyer and MacNaughton ("D&M") effective November 30, 2014. This report marks a major Company milestone with the recognition of reserves for the first time on the Ortakoy Block highlighted by Proved plus Probable reserves of 21.2 billion cubic feet of gas having a net present value (after Turkish income taxes) at 10% discount rate of $85.7 million US (approximately $100 million Canadian). The Company is also pleased to announce the results of a prospective resource evaluation of the Eocene formations on the entire Ortakoy block by D&M effective December 31, 2014 along with the testing results of the Poyraz S4-1 and Poyraz N3-1 wells that were drilled in Q3 2014.

The Poyraz Ridge field was discovered in Q2-Q3 2013 with the drilling of the Poyraz-1ST and Poyraz-2 wells respectively and further appraised in 2014 with the Poyraz West-1 well. It is located in the AR/MRS/3913 block (the "Ortakoy Block"), in the Thrace Basin on the Gallipoli Peninsula in the northwest or European side of the Republic of Turkey.

Marsa is operator and holds 100 percent working interest in the Ortakoy Block through its wholly owned subsidiary Marsa Turkey BV.

Poyraz Ridge Field Working Interest Reserve Highlights

Highlights of the evaluation include:

  • Total Proved ("1P") reserves increased from 0 to 9.8 billion cubic feet ("bcf") of natural gas and from 0 to 94 thousand barrels ("mbbls") of condensate.
  • Total Proved plus Probable ("2P") reserves increased from 0 to 21.2 bcf of natural gas and from 0 to 173 mbbls of condensate.
  • Total Proved plus Probable plus Possible ("3P") reserves increased from 0 to 35.8 bcf of natural gas from 0 to 288 mbbls of condensate.
  • Working interest 2P reserves net present value at 10% discount rate after Turkish income Taxes of $85.7 million US (approximately $100 million Canadian). The estimated value disclosed does not represent fair market value.
  • The gas dominated reserves are in a high value gas market that is relatively unaffected by fluctuations in world oil price.

"With the discovery of the Poyraz Ridge gas field, Marsa Energy has made one of the most significant finds in the Thrace basin in the last 10 years." said Blair Anderson, President and CEO. "Our exceptional success with the drill bit, which in combination with acquiring a Gas Wholesalers Licence and obtaining approval from Botas (Turkey's state pipeline company) to tie into their Inter-Turkey Greece Italy connector pipeline transecting the Ortakoy Block, has enabled Marsa to convert contingent resource into significant high value 1P, 2P and 3P reserves on the Poyraz Ridge field." "In 2015, we are focussed on tying the Poyraz Ridge field into the Botas gas grid with a view to having first gas sales in Q1 2016. Further drilling to explore nearby lookalike structures in combination with additional 2D and 3D seismic should not only add to our reserve base but also allow us to retain the majority of the Ortakoy block upon conversion to production licence(s) in late 2015."

The following table summarizes the results of the reserves evaluation of the Company's Poyraz Field as of November 30, 2014.

Poyraz Ridge Field
Marsa Company Interest
November 30, 2014
NI 51 -101 Compliant

Sales Gas
Million Cubic Feet
(mmcf)

Condensate
Thousand Barrels
(mbbls)
Proved (undeveloped) 9,844 94
Total Proved 9,844 94
Probable 11,332 79
Total Proved + Probable 21,176 173
Possible 14,637 115
Total Proved + Probable + Possible 35,813 288

Notes:

  1. Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
  2. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
  3. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

It is important to note that the Destan Field, discovered in 2010 -2011, is not included in this reserve report hence any resources associated with Destan would be additive.

Ortakoy Eocene - Miocene Prospective Resource Report

The majority of the 2P reserves in the Poyraz Ridge field are attributed to the Eocene-age Ceylan formation sands and the Sogucak formation carbonates. D&M evaluated the block-wide Prospective Resources associated with the Eocene (and Miocene) formations within a series of en-echelon fold-dominated structures similar to the Poyraz Ridge field. D&M evaluated individual prospects and seven leads, yielding the following results.

Low Estimate Best Estimate High Estimate Mean Estimate
Gross Prospective Raw Natural Gas (mmcf)
289,443

421,629

614,220

440,194

Notes:

  1. Prospective resources are those quantities 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.
  2. There is no certainty that any portion of the prospective resources estimated herein will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources evaluated.

When geological risk factors are applied, the Gross Mean Risk Adjusted Estimate of Prospective Natural Gas Resources is 35,667 mmcf. Importantly, the NW Poyraz Ridge prospect and the Poyraz Ridge footwall prospect comprise 16,547 mmcf and 2,307 mmcf respectively of this total risk adjusted estimate. The NW Poyraz Ridge prospect, a similar fold structure to the Poyraz Ridge field, is located only 2.7 km north of the Poyraz Ridge field and the Poyraz Ridge footwall prospect is comprised of a down thrown fault block immediately adjacent to the Poyraz Ridge field. Marsa anticipates drilling both these prospects in 2015.

The reserves evaluation and resource evaluation was conducted by D&M with reference to National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") relying on the Canadian Oil and Gas Evaluation Handbook ("COGEH") reserves definitions.

Poyraz N3-1 Test Results

The Poyraz N3-1 exploration well, located approximately 1,400 metres ("m") north of Poyraz-2, spudded August 15, 2014 and was drilled directionally to 1,000 m total measured depth ("TMD"). The well was cased with a plugged back TMD of 454.5 m and the rig was released August 28, 2014. Marsa commenced testing operations on November 27, 2014, perforating a net 5 m over four discrete intervals, within a gross interval spanning 302.0 m to 342.0 m. After a cleanup flow and shut in period, the well flowed for 24 hours with a final gas rate of 730 thousand cubic feet per day ("mcfd"). Approximately 6 barrels per hour of formation water was produced throughout the 24 hour flow period. No condensate was produced. Pressure analysis indicates limited reservoir capacity in the tested intervals and as such this well is not anticipated to add material reserves in the future.

Poyraz S4-1 Test Results

The Poyraz S4-1 exploration well, located approximately 3,500 m ENE of Poyraz-2, spud October 12, 2014 and was directionally drilled to 929.0 m TMD. The well was cased with a plugged back TMD of 503.1 m. Marsa commenced testing operations on November 1, 2014, perforating a net 31 m over nine discrete intervals within a gross interval spanning 293.5 m to 350.0 m. After a cleanup flow and shut in period, the well flowed for 24 hours with a final gas rate of 663 mcfd with no water or condensate production. Pressure analysis indicates limited reservoir capacity in the tested intervals and as such this well is not anticipated to add material reserves in the future.

Marsa Energy Inc.

Marsa (www.marsaenergy.com) is an international energy company engaged in the acquisition, exploration, development and production of oil and natural gas. The Company's 100 percent working interest property is located on the Gallipoli Peninsula in the Republic or Turkey and is held through its wholly owned subsidiary, Marsa Turkey BV.

Marsa is headquartered in Calgary, Alberta, Canada and is publicly traded on the TSX Venture Exchange in Toronto, Canada.

ADVISORY: This press release may contain "forward-looking information" within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact, included herein may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", " expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information reflects Marsa's current beliefs and is based on information currently available to Marsa and on assumptions Marsa believes are reasonable. These assumptions include, but are not limited to, details regarding Marsa's assumptions with respect to the potential presence of natural gas from the exploration wells, as described above. 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 Marsa to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; commodity prices; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation affecting Marsa; timing and availability of external financing on acceptable terms and the drilling and completion of future wells.

Although Marsa 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. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release represent the expectations of Marsa as of the date of this news release and, accordingly, are subject to change after such date. However, Marsa expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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