Gas Plus Khalakan (GPK), the sole contractor of the Khalakan PSC in the Kurdistan Region of Iraq, has issued an end-2017 operations update regarding the Shewashan field.

Oil Sales:

Total payments received by GPK for oil sales now amount to $9.0 million representing 190,115 barrels of GPK entitlement oil sold through to the end of September 2017. Sales from  October  to December  has  been  invoiced  through  the  traditional  operating procedures in place with the KRG Ministry of Natural Resources.

Oil Production:

In total, cumulative field production to date exceeds 1,300,000 barrels of oil. Current total field production is 1,000 barrels per day. Total oil production for the 3rd quarter 2017 was 81,207 barrels and 422,027 barrels have been produced in 2017, up to and including 1 December 2017.

These amounts are significantly below that required to meet forecast annual production targets and break-even economics. There are two main reasons for this lower production.

Firstly, water production rates in the Qamchuga formation have limited oil production rates. The Qamchuqa formation is heavily fractured and many of these fractures are connected to the aquifer.

Secondly, production rates from the Shiranish and Kometan reservoirs have been limited, due to these formations having a tight matrix, with their fracture network being not as developed and extensive as in the Qamchuqa reservoir. GPK continues to recomplete the four Shewashan wells to limit water production in the Qamchuga and stimulate the Kometan and Shiranish reservoirs to facilitate greater production rates.

This activity is summarized below:

Shewashan #1:

Current production rate: 350 bopd and <5% water cut from the Qamchuqa reservoir. Recompletion plans include: perforation and acid stimulation of the Kometan reservoir.

Shewashan #2:

Current production rate: 650 bopd and low water cut from the Kometan reservoir. Recompletion plans include:  Larger acid stimulation in the Kometan to increase the production from perforated intervals (45m) and a possible propped hydraulic frac in the Shiranish reservoir which has yet to be tried in the field.

DNO ASA, the Norwegian oil and gas operator, today announced a stepped up drilling campaign in the Kurdistan region of Iraq and the Sultanate of Oman on the back of 2016 operating profits and improved payments for exports from its flagship Tawke field in Kurdistan.

The Company also released its annual reserves report which showed an increase in combined proven and probable reserves (2P) and contingent resources (2C) following the new oil discovery at the Peshkabir field in Kurdistan.

DNO reported interim 2016 operating profits of USD 6 million, reversing an operating loss of USD 174 million in 2015. Following two years of cost cutting and asset rationalization, the Company is restarting investments to replenish its oil and gas reserves and restore production across its portfolio.

Planned 2017 capital investments are estimated at USD 100 million, and include four new production wells at Tawke. Elsewhere in Kurdistan, the Company plans to drill a third well at Peshkabir and an appraisal/production well at the Benenan field in the Erbil license. In Oman, two wells will be brought back onstream at Block 8 offshore with plans to nearly double output at the West Bukha and Bukha fields.

The Company is considering three additional wells at Tawke to raise production above current levels of around 115,000 barrels of oil per day (bopd) contingent on regular and predictable export payments from the Kurdistan Regional Government.

During 2016, DNO received ten payments totaling USD 210 million net to the Company for Tawke exports and outstanding receivables. Three additional payments totaling USD 59 million net to DNO have been received to date in the first quarter.

These payments create momentum as we move into 2017,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani.

Early production from Peshkabir and transport of oil to the Company’s gathering, processing and export facilities at Fish Khabur 12 kilometers away is under assessment.

The Peshkabir field positions us for production and reserves growth in our Kurdistan portfolio,” said Mr. Mossavar-Rahmani, indicating that the Cretaceous discovery added 47.9 million barrels of oil equivalent (MMboe) of gross 2C resources.

As of 31 December 2016, DNO’s Company Working Interest (CWI) 2P reserves and 2C resources were estimated at 529.6 MMboe, up from 523.1 MMboe at year-end 2015. CWI 2P reserves were estimated at 368.3 MMboe, down from 391.5 MMboe at year-end 2015 after adjusting for CWI production of 25.3 MMboe during the year and a positive technical revision of 2.1 MMboe. CWI 2C resources were estimated at 161.3 MMboe, up from 131.6 MMboe at year-end 2015.

At Tawke, 2P reserves and 2C resources stood at 604.0 million barrels (MMbbls) at year-end 2016, down from 643.2 MMbbls at year-end 2015. Gross proven (1P) reserves stood at 347.7 MMbbls, down from 387.0 MMbbls at year-end 2015. Gross 2P reserves stood at 503.8 MMbbls, down from 543.0 MMbbls at year-end 2015. The reduction in each category reflected total production of 39.3 MMbbls from the field during the year.

International petroleum consultants DeGolyer and MacNaughton carried out the annual independent assessment of the Tawke field. DNO internally evaluated the remaining assets.

(Source: DNO)

Gas Plus Khalakan (GPK), the sole contractor of the Khalakan PSC in the Kurdistan Region of Iraq, issued an operations update regarding the Shewashan field.

The GPK operations update outlines the continued operating and development events occurring on the Shewashan field including the spud of a new well, Shewashan-4. Key events include;

  • Shewashan-4 Spud: The 4th Shewashan production well has been spud with dual targets including the existing productive zones in the Cretaceous and the unexplored and deeper Jurassic formation.
  • Shewashan-3 Drilling Continues: The deviated well is drilling in the targeted Cretaceous reservoir with completion and production expected to occur before the end of the year.
  • Oil Production and Sales Continue:   Oil sales from the Shewashan-2 well have averaged 3,600 bopd in 2016 with deliveries to the KRG’s Bazian refinery.  Proceeds from oil sales have been received through the end of June.
  • Seismic Reprocessing:  GPK continues to reprocess and remap existing seismic data which is indicating further oil potential in the reservoir attic.
  • Revised Reserve Audit: Reserve auditor DeGolyer & MacNaughton will revise the existing 2015 reserve report and is expecting the report to be published prior to year-end.

Toufic Chahine, Chairman of Range Energy, said:

“Shewashan’s development continues to progress at a rapid rate and we are excited to be actively drilling with two rigs on the block and targeting additional productive capacity in the Jurassic reservoir.  In the near term we look forward the results of the Shewashan-3 well and the revised reserve audit published by DeGolyer & MacNaughton.”

Range Energy Resources is a 24.95 percent indirect shareholder of GPK through its ownership of 49.9% of the shares of New Age Alzarooni 2 Limited (“NAAZ2”).  NAAZ2 owns 50 percent of the shares of GPK.

(Source: Range Energy Resources)

Gas Plus Khalakan (GPK), the sole contractor of the Khalakan PSC in the Kurdistan Region of Iraq, issued an operations update regarding the Shewashan field.

The GPK operations update outlines the continued operating and development events occurring on the Shewashan field including the spud of a new well, Shewashan-4. Key events include;

  • Shewashan-4 Spud: The 4th Shewashan production well has been spud with dual targets including the existing productive zones in the Cretaceous and the unexplored and deeper Jurassic formation.
  • Shewashan-3 Drilling Continues: The deviated well is drilling in the targeted Cretaceous reservoir with completion and production expected to occur before the end of the year.
  • Oil Production and Sales Continue:   Oil sales from the Shewashan-2 well have averaged 3,600 bopd in 2016 with deliveries to the KRG’s Bazian refinery.  Proceeds from oil sales have been received through the end of June.
  • Seismic Reprocessing:  GPK continues to reprocess and remap existing seismic data which is indicating further oil potential in the reservoir attic.
  • Revised Reserve Audit: Reserve auditor DeGolyer & MacNaughton will revise the existing 2015 reserve report and is expecting the report to be published prior to year-end.

Toufic Chahine, Chairman of Range Energy, said:

“Shewashan’s development continues to progress at a rapid rate and we are excited to be actively drilling with two rigs on the block and targeting additional productive capacity in the Jurassic reservoir.  In the near term we look forward the results of the Shewashan-3 well and the revised reserve audit published by DeGolyer & MacNaughton.”

Range Energy Resources is a 24.95 percent indirect shareholder of GPK through its ownership of 49.9% of the shares of New Age Alzarooni 2 Limited (“NAAZ2”).  NAAZ2 owns 50 percent of the shares of GPK.

(Source: Range Energy Resources)

By John Lee.

Gas Plus Khalakan, a 75%-owned subsidiary of New Age, is about to commence the development drilling of three wells for Phase 1 of the approved Field Development Plan for the Shewashan oil field in the Kurdistan Region of Iraq.

Phase 1 of the development includes the installation of an Early Production Facility and targets production of 10,000 barrels of oil per day in 2016.

The discovery well Shewashan-1, drilled in 2014 to a final depth of 3038m in the Cretaceous, produced light oil from reservoir zones in the Shiranish, Kometan and Qamchuga formations at a maximum rate of 2,850 bopd of 46° API oil.

The exploration well was put onto production for a period of 180 days, producing a total of 65,000 barrels of oil before increased water production required the well to be shut-in. The oil was sold into the domestic market and transported by road tanker to a nearby refinery by the buyer.

The Proved plus Probable (2P) Oil Reserves at Shewashan have been independently certified by DeGoyler and MacNaughton at 75 million barrels. GPK is the Operator of the Khalakan PSC with an 80% interest.

Steve Lowden, CEO of New Age, said:

‘Despite the current low oil price environment GPK is fully committed to the development of the Shewashan field reserves and to supporting the KRG as it becomes a significant oil producer on the world stage over the next few years.

“It is a world-class basin that remains a highly economic prospect for the company.’

(Source: OilVoice)

(Drilling rig image via Shutterstock)