GRAND CAYMAN, CAYMAN ISLANDS--(Marketwire - Nov. 13, 2012) - Tethys Petroleum Limited (TSX:TPL)(LSE:TPL) today provided an update on testing of the AKD07 well in Kazakhstan and seismic and production updates in Tajikistan.
AKD07 Exploration / Appraisal
At the AKD07 well, testing has now been temporarily suspended in the Jurassic carbonate whilst further options are being evaluated, one of which is to bring in a pump to lift the well. During the initial testing of this zone no formation oil was recovered after perforating, although hydrocarbons were indicated from the wireline logs. Further extraction of formation fluids is required to fully ascertain the oil potential of the Jurassic carbonate potentially requiring pumping and/or acidisation. Currently no pump is available and as such there are no immediate plans for such testing. An ongoing review of AKD07 and other wells previously drilled in the Jurassic carbonate has indicated that oil production may be possible from wells in this horizon which have previously yielded inconclusive results. These wells may be tested as part of an integrated pumping programme at a convenient time, a technique that has had some success with the AKD05 well that is producing oil with the use of a progressive cavity pump (PCP). Also in well AKD07 final log results from the well indicated the "Dyna" sheet sand was present and of good quality but does not appear to have any moveable hydrocarbons. The "Doris" channel sand is now interpreted as being absent, the interval being represented by non-reservoir flood plain deposits. As such the downdip extension of the Doris channel sand still remains to be found with the reservoir sand geometry within the floodplain and proven oil system still to be fully delineated.
Further exploration / appraisal targets in the greater Doris area are currently being finalized for drilling in 2013.
Production/Transportation - Aral Oil Terminal
In the second quarter commercial oil sales commenced through the Aral Oil Terminal (the "AOT"), owned by Tethys and a 50% partner, which effectively halved the oil trucking distance and provided better control over the oil sales chain. Production has steadily increased over a period as each part of the sales chain was optimized.
AOT Phase 2 construction that will allow an increase in throughput capacity from 4,200 barrels of oil per day ("bopd") up to 6,300 bopd is now complete with the installation of two 1,000 cubic metre tanks (approximately 12,500 barrels), associated dehydration and pumping equipment. It is expected that both the working and State Commissions approvals will be finalized by the end of November. Current production from the Doris field has increased steadily and is currently averaging approximately 4,000 bopd.
With the current well stock it is forecast that a production rate of at least 4,500 bopd can be achieved on a continual basis. Higher rates can be achieved but it is believed that these rates are most optimal for this reservoir with the current wells.
In recent news from Kazakhstan it is reported in a press release that the French oil and gas company, Total S.A. has acquired a 75% stake in two onshore exploration blocks which are next to and adjacent to the Tethys Kul-Bas acreage in the North Ustyurt basin near the Aral Sea. The press release states that Total will acquire seismic data and drill a well in 2013.
The Tajik Resource Report, independently produced by Gustavson Associates, calculated a total gross mean unrisked recoverable prospective resource of 27.5 billion barrels of oil equivalent across the Bokhtar Production Sharing Contract ("Bokhtar PSC") Contract Area.
The current 870 kilometre 2D seismic data survey that commenced in late August is ongoing. This survey is designed to target some of the prospective areas seen on previous regional seismic, magnetic, and gravity surveys as having potential for deeper potentially prolific reservoirs such as Lower Cretaceous sandstones and sub-salt Jurassic carbonates.
Now active in the Vaksh valley, the survey is progressing well and over 37% of the field data have already been acquired and processing is underway. Initial interpretation will start this year in order to map potential drilling locations.
It is expected that this new seismic programme will further confirm the high potential in the Tethys PSC acreage. Tethys owns an 85% interest in the Bokhtar PSC (through its subsidiary Kulob Petroleum Limited).
Tethys has recently announced that Kulob Petroleum Limited has signed a Memorandum of Understanding to execute a farmout agreement on the Bokhtar PSC with the aim of concluding the agreement by year-end. The potential acquiring party is an international oil and gas company ("IOC").
Further work on the Beshtentak Field has been carried out in light of the initial success of the workover on the BST20 well which is currently producing approximately 225 bopd. Testing of the BST65 well (a similar well to the BST20 well) in the northern part of the field is ongoing, with results expected later this month.
Tethys is focused on oil and gas exploration and production activities in Central Asia with activities currently in the Republics of Kazakhstan, Tajikistan and Uzbekistan. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.
This press release contains "forward-looking information" which may include, but is not limited to, statements with respect to our operations. Such forward-looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. See our Annual Information Form for the year ended December 31, 2011 for a description of risks and uncertainties relevant to our business, including our exploration activities. A barrel of oil equivalent ("boe") conversion ratio of 6,000 cubic feet (169.9 cubic metres) of natural gas = 1 barrel of oil has been used and is based on the standard energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.