Oil & Gas Corporate News
Max Petroleum (LON:MXP) (BUY, £0.50) (MXP, 22.75p, ? (24.66%)) confirmed that initial test results from the Cretaceous reservoir in the UTS-1 discovery well indicate a 55m oil column with 31m of net oil pay. Perforations at depths ranging from 120-128m and 155-158m produced 26oAPI gravity crude oil on pump at indicative rates of approximately 24bopd during a brief clean-up period. The duration of the test was limited due to government regulations and the well will be placed on a 90-day long term production test after all necessary government approvals are obtained in the next few weeks. Based on a probable oil/water contact at 161m as indicated by revised petrophysical analysis and current mapping, the potential oil in place for the Cretaceous reservoir is estimated to be 85-135mmbbl. While other Cretaceous fields in the Pre-Caspian Basin from similar depths report recovery factors of 20-30% of original oil in place, long-term testing and pressure analysis of the discovery well combined with confirmation drilling and a new seismic survey specifically focused on these shallow reservoirs will be needed to more accurately define recoverable oil reserves. Enhanced recovery techniques, such as water flooding, may also be needed to improve recovery from such shallow depths with low reservoir pressure. Additional intervals in the Triassic and Jurassic are currently being tested. A full update will be made as soon as the testing is complete, which is expected in the next several weeks. The Company plans to drill three confirmation wells in the first quarter of 2011 and has tendered for a ZJ-20 shallow rig to drill the wells. The Company also intends to acquire a high-fold 3D seismic survey over the Uytas structure specifically designed to image the shallow reservoirs in the field as soon as practicable. Also, Government approval has been received to extend the trial production project ("TPP") for the Zhana Makat Field for six months to 1 July, 2011. The TPP extension allows the Company to drill two additional Triassic wells in the field, which the Company intends to drill in the first quarter of 2011. The Company has filed an application to convert Zhana Makat to full field development status, which will allow the Company to develop and produce the field for up to 25 years under the terms of the Blocks A&E Licence. The ZJ-30 drilling rig…
