CALGARY, ALBERTA--(Marketwired - Oct. 21, 2013) - Serinus Energy Inc. (TSX:SEN) ("Serinus", "SEN" or the "Company"), an international upstream oil and gas exploration and production company, is pleased to report that corporate production (Ukraine and Tunisia) has reached a new high of more than 5,150 barrels of oil equivalent per day ("boe/d") with the tie-in of the Olgovskoye-4 ("O-4") well in Ukraine after its successful fracture stimulation.
Two wells, the O-4 and Olgovskoye-5 ("O-5") wells were successfully stimulated resulting in maximum test rates of 4.0 million cubic feet per day ("MMcf/d") from the O-4 well and 1.3 MMcf/d from the O-5 well. The O-4 well has been tied-in for commercial production and is currently producing at 3.9 MMcf/d (2.73 MMcf/d net to SEN) of natural gas through the Olgovskoye/Makeevskoye gas processing facility (the "Facility"). The Facility is at maximum capacity and the production of the O-4 well has backed out approximately 2 MMcf/d of gas that had been flowing through it. The Facility is being expanded and, upon completion in the first quarter of 2014, it will be able to handle approximately 68 MMcf/d of natural gas production.
The Ukraine production is operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary in which Serinus has an effective 70% ownership interest. Gross production from Ukraine is now more than 30.5 MMcf/d of natural gas and 127 bbl/d of condensate resulting in net production to Serinus' 70% interest of 21.4 MMcf/d of natural gas and 89 bbl/d of condensate (3,656 boe/d), an increase of 16% when compared with the 2012 exit production rate of 3,154 boe/d. The balance of the Company's production is 1,500 boe/d from its Tunisian assets.
The stimulated zone in the O-4 well was a Middle Bashkirian silty sandstone interval with a gross thickness of 5 metres which occurs at a depth of approximately 2,560 metres and is referred to as the R30c unit. This is the same zone that was successfully stimulated in the O-6 and O-8 wells in 2011. The zone had low permeability and was not producing gas at commercial rates in the O-4 well before the stimulation. The stimulation, which was designed to penetrate beyond the immediate vicinity of the well bore by creating fractures to liberate gas trapped in the tight formation, was successful. The O-4 well flowed gas at 4.0 MMcf/d immediately after the stimulation and has been tied-in for commercial production.
The O-4 well was drilled in 2006 to a total depth ("TD") of 2,700 metres and multiple gas-bearing zones were encountered in the Moscovian and Bashkirian sections. The well was selectively perforated over the interval from 2,258 to 2,282 metres which included several formations above, below and including the recently fracture stimulated R30c zone. The original combined interval produced cumulative gas production of 2 billion cubic feet ("BCF") of gas. The majority of the gas production was believed to have been produced from the lower perforation interval in the B6b formation which is currently producing in the O-7 well. During Q2 2012 production discrepancies were observed in the form of random variations in flowing pressure and as a result it was decided to cement squeeze the existing perforations in order to re-assess the productivity of the well, which was producing 0.35 MMcf/d at that time. Based upon the petrophysical characteristics of the R30c and the positive results from stimulating the R30c zone in the O-6 and O-8 wells it was determined that the best course would be to stimulate the R30c in the O-4 well in order to maximize both the production rates and the reserve potential of this formation. The well was re-perforated in the R30c formation from 2,258 to 2,263 metres and showed a bottom hole pressure of 2,469 pound-force per square inch ("psi") compared to the previous producing pressure of 1,543 psi.
The stimulated zone in the O-5 well, the same Middle Bashkirian R30c zone stimulated in the O-4 well, had a gross thickness of 12 metres at a depth of approximately 2,300 metres. The zone had low permeability and was not producing gas before the stimulation. The frac, which was designed to penetrate beyond the immediate vicinity of the well bore by creating fractures to liberate gas trapped in the tight formation, was successful. The O-5 well flowed gas at 1.3 MMcf/d immediately after the stimulation and has been suspended pending tie-in in the first quarter of 2014 after the upgrade of the gas processing facility.
The O-5 well finished drilling in April 2007 after reaching a TD of 2,700 metres. Multiple gas-bearing zones were encountered in the Moscovian and Bashkirian sections. The well was selectively perforated from the interval 2,281 to 2,325 metres which included formations above, below and including the R30c. The well had produced cumulative gas production of 0.1 BCF from the combined formations until September 2009 when it was decided to plug the existing perforations and move up-hole to the R9e formation at 1,559 metres. The R9e produced cumulative gas of 0.9 BCF and was producing at 0.2 MMcf/d when the zone was shut-in to prepare the well for fracture stimulation in the R30c. The plugs below the R9e were then drilled out and perforations were squeezed where necessary to ensure isolation and the well was re-perforated in the R30c interval from 2,296 to 2,302 metres and successfully fracture stimulated.
Jock Graham, Executive Vice President & Chief Operating Officer of Serinus said - "This development is very exciting for the Company. In addition to extending our track record of consistent success with fracture stimulations in Ukraine, we have potentially proved up a significant new play which could extend over much of our Olgovskoye and Makeevskoye license areas. This could further extend the Company's history of reserve and production growth in Ukraine, as well as extend the Company's drilling programme further into the future."
About Serinus Energy
Serinus is an international upstream oil and gas exploration and production company with a diversified portfolio of projects in Ukraine, Brunei, Tunisia, Romania and Syria and with a risk profile ranging from exploration in Brunei, Romania and Syria to production and development in Ukraine and Tunisia. The common shares of the Company trade under trading symbol "SEN" on both the WSE and the TSX.
In Ukraine, Serinus owns an effective 70% interest in KUB-Gas LLC. The assets of KUB-Gas LLC consist of 100% interests in five licences near to the City of Lugansk in the northeast part of Ukraine. Four of the licences are gas producing.
In Tunisia, Serinus owns a 100% working interest in the Chouech Es Saida, Ech Chouech, Sanrhar and Zinnia concessions, and a 45% working interest in the Sabria concession. Four of the concessions are currently producing oil or gas.
In Brunei, Serinus owns a 90% working interest in a production sharing agreement which gives the Company the right to explore for and produce oil and natural gas from Block L, a 1,123 square kilometre area covering onshore and offshore areas in northern Brunei.
In Romania, Serinus owns an undivided 60% working interest in the onshore Satu Mare concession, a 2,949 square kilometre exploration and development block, in north western Romania.
In Syria, Serinus holds a participating interest of 50% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon the satisfaction of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometre area in northwest Syria. The Company has an agreement to assign a 5% ownership interest to a third party subject to the approval of Syrian authorities. Serinus declared force majeure, with respect to its operations in Syria, in July 2012.
The main shareholder of the Company is Kulczyk Investments S.A., an international investment house founded by Polish businessman Dr. Jan Kulczyk.
Translation: This news release has been translated into Polish from the English original.
Forward-looking Statements: This release may contain forward-looking statements made as of the date of this announcement with respect to future activities of the Company or any of its subsidiaries and related to its interest in Ukraine and to certain wells within that the Olgovskoye and Makeevskoye Licence areas that either are not or may not be historical facts. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable as of the date hereof, any potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors that could impair or prevent the Company from completing the expected activities on its projects include thatthe Company's projects experience technical and mechanical problems, there are changes in product prices, failure to obtain regulatory approvals, the state of the national or international monetary, oil and gas, financial, political and economic markets in the jurisdictions where the Company operates and other risks not anticipated by the Company or disclosed in the Company's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties and actual results may vary materially from those expressed in the forward-looking statement. The Company undertakes no obligation to revise or update any forward-looking statements in this announcement to reflect events or circumstances after the date of this announcement, unless required by law.
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