Page 13 - FSUOGM Week 01 2020

FSUOGM PROJECTS & COMPANIES FSUOGM
Malaysian firm sinks new Kazakh probe
KAZAKHSTAN
Reach has drilled three previous wells at Yessen, all of which struck oil.
MALAYSIAN oil firm Reach Energy has sunk a new exploration well at the Emir oil project in western Kazakhstan.
Work began on the Yessen-4 well, targeting a potential hydrocarbon trap near the existing Yessen oilfield, on December 24, Reach said in a filing on December 24. The aim is to confirm an extension of the Yessen structure.
The well should take 120 days to drill to a depth of 3,753 metres, Reach said, penetrating the T2 carbonate reservoirs, specifically T2A, T2B and T2C.
Reach acquired a 60% stake in Emir from Chinese firm MIE Holdings in 2016 for $176mn. The project consists of four commercially pro- ducing oilfields, Dolinnoe, Aksaz, Emir and Kariman, as well as Yessen and North Kariman, which are currently in trial production. Reach and MIE also control an 804.8-square km explo- ration area encompassing the fields, where a number of prospects have been identified.
The pair have drilled three previous wells at Yessen, all of which struck oil. The most recent, Yessen-3, was completed in October and inter- sected up to 34 metres of an oil-bearing reservoir. Given these past results, Reach said the chance of success at Yessen-4 was “high.”
Reach also reported the discovery of a “highly graded” hydrocarbon trap at a new exploration well near the western flank of the Kariman field in November.
On the financial front, the Malaysian player’s recent performance has been less encouraging. The company’s core losses widened by 50.9% to MYR35.9mn ($8.75mn) in the nine months ending September 30, on the back of lower pro- duction and higher financing costs. Output was affected by workovers at some wells.
Malaysia’s Hong Leong Investment Bank (HLInvest) warned in a research note in early December that Reach needed to raise $100mn to fund its capital expenditure plans, and would likely turn to debt financing. It also had a MYR312.9mn payment that was due to be made to MIE by the end of 2019, according to HLIn- vest, which it was looking to defer. Reach could not be reached for a comment on whether this request was granted.
Meanwhile, Reach and MIE are yet to secure an extension from the authorities to their explo- ration permit at Emir, which expires this month. The pair are also working to obtain commer- cial production permits at Yessen and North Kariman. ™
Caspian sees deep well success in Kazakhstan
KAZAKHSTAN
Caspian says this is the result its been waiting for a long time.
KAZAKHSTAN-FOCUSED junior Caspian Sunrise enjoyed a surge in its share price on Jan- uary 2 after reporting strong flow results from a deep well at its core BNG asset in the west of the country.
Shares at the London-traded firm were up 22% during morning trade at GBP0.0954 each, after it disclosed that its A5 well, sunk to a depth of 4,405 metres, had been flowing without arti- ficial simulation for four days. Caspian said the well had been producing oil without interrup- tion, with the rate steadily increasing to 1,500 barrels per day (bpd). Further increases are anticipated, it said.
Caspian took control of the BNG in 2011. The contract area contains two oil plays: one which is shallow and relatively easy and cheap to exploit, and another which is much deeper and technically more difficult to commercialise, but also expected to yield much higher flow rates. The company began testing deeper structures in 2013 but has had some difficulty in achieving stable flow rates.
The launch of A5 has more than doubled
Caspian’s total output, from 1,389 bpd in Novem- ber, although the junior cautioned it was still too early to say at what level it might flow on a con- sistent basis.
Work continues on Caspian’s three other deep wells, A6, A8 and 801, the company said, in order to bring them into production as well.
“This is the result we have been working to achieveforalongtime,”CaspianchairmanClive Carver said in a statement. “While we need to be careful not to get over-excited, as it is possi- ble the continuous flows exhibited over the past four days might be interrupted or reduced as happened before, the strength of the flows and the uninterrupted three-day period lead are extremely encouraging.”
The flows “lead the company’s management to believe deep well A5 will be a mainstay of the production expected over the coming years from the large quantities of deep oil believed to be present on the Airshagyl structure,” he continued.
Caspian plans a 90-day flow test at A5 to help quantity Airshagyl’s reserves.™
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