Tethys Petroleum to accelerate Kazakh drilling

Tethys Petroleum Ltd. said it will simultaneously drill two deep exploratory wells in the Ustyurt basin in Kazakhstan.

The AKD08 Doto and AKD09 Dexa wells will be drilled simultaneously providing large cost savings and exposure to two potentially high impact prospects this year, the company said.

AKD08 is southwest of Doris field and north of the Dione oil discovery. It targets several zones including the Lower Cretaceous sandstone and Upper Jurassic carbonate sequences as proven in Doris and, after significantly more interpretation being carried out over the summer, also the deeper Triassic sequence that had good hydrocarbon shows in nearby wells, including the AKD01 Doris oil discovery.

Prospectivity may also exist in the Jurassic sandstone sequence that flowed oil in the Dione AKD03 well. The Doto prospect has 22 million bbl gross mean unrisked recoverable prospective oil resources attributed to it in the Cretaceous and Upper Jurassic sequences. The deeper Triassic sequence has not been independently assessed.

Tethys plans to spud in early September using its own rig and take 70 days to drill to 3,500 m.

The AKD09 exploratory/appraisal well is northwest of Doris field and is designed to target Lower Cretaceous channel sandstone sequences similar to the current major producing unit in Doris field. The Dexa prospect is attributed 14 million bbl gross mean unrisked recoverable prospective oil resources.

To spud at the end of September, it is to go to 2,400 m in 45-50 days using a Tethys rig being mobilized from Tajikistan.

Further analysis of the Doris field producing wells is under way prior to the installation of artificial lift equipment and improvements in fluid handling planned for September. This work has resulted in production levels being temporarily reduced to 2,600 b/d of oil, and further work is under way. Once the work is completed, production is planned to return to more than 3,500 b/d.

Meanwhile, five more shallow gas exploratory wells are expected to be drilled back to back starting in late September-early October on seismic prospects. These are relatively low-risk targets. Of the last 13 shallow exploratory wells Tethys drilled in the Akkulka block, 11 tested commercial gas. This accelerated program will continue into the first half of 2014.

The planned gas exploratory wells are typically 600-800 m measured depth and will take up to 3 weeks each to drill. These are located mainly in the central and southeastern part of the Akkulka exploration contract and relatively close to existing gas infrastructure and the Akkulka production contract area.

Tethys is producing 13.6 MMcfd and has refocused some of its investment into accelerating gas development and exploration after the large increase in the realized gas price in January 2013.

The new Kazakhstan-China gas trunkline under construction (planned to pass through Tethys’ contract areas) will provide an additional commercialization route and offers potential further price upside.

Overall infrastructure in the field area is also improving, and a railway is under construction with a new rail station planned to be built 70 km from the Doris oilfield and 23 km from the nearest Akkulka gas well. This could provide more cost-effective transportation options for oil plus a nearby market for some gas, the company said.

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