Ukraine: Kulczyk's Makeevskoye-20 Well Tests Gas at 5.3 MMcf/d
Kulczyk Oil Ventures Inc has reported that the Makeevskoye-20 well has tested gas at a rate of 5.3 million cubic feet per day ("MMcf/d") through a 10 mm choke. The Company expects to have the well tied in for production in the fourth quarter.
The M-20 well was drilled to a total depth ("TD") of 2,000 metres and cased to that depth in early August, pending completion of the well for commercial gas production. The primary objective of the well was to evaluate the potential of the R8 zone at a depth of approximately 1,450 metres and further develop the Makeevskoye R8 Pool which was originally discovered by the Makeevskoye-19 ("M-19") well drilled in the second half of 2010 and further delineated by the Makeevskoye-21 ("M-21") during the second quarter of 2012. The top of the R8 zone in the M-20 well is approximately 20 metres higher than in the M-19 well and 36 metres higher than in the M-21 well.
At the North Makeevskoye license, the initial exploration NM-1 well, reached a TD of 2,500 metres and was cased to TD in June 2012. Evaluation of both the wireline logs and information obtained during the drilling of the well indicates potential for hydrocarbon accumulation in both Bashkirian and Serpukovian aged sediments. Two reservoir units are within a 70 metre thick limestone interval and another appears to be within a 30 metre thick sandstone. Testing of both the sandstone and the carbonate indicates that these reservoirs do not have sufficient permeability to produce without stimulation. KOV is looking at the potential for an acidization of the limestone and is reviewing stimulation options for the sandstone, including potential fracture stimulation.
The North Makeevskoye 3D seismic survey has identified five additional structural prospects and interpretation of potential stratigraphic prospects is continuing. Subject to permitting, the first of the additional structural prospects is expected to be evaluated by the drilling of the North Makeevskoye-2 ("NM-2") well near the end of 2012. NM-2 is located in the southern part of the North Makeevkoye License only 4 kilometres north of the Makeevskoye gas production facility.
The Makeevskoye-16 well has a projected TD of 3,850 metres and is expected to take approximately 90 days from the start of drilling operations in early August to reach TD. The M-16 well is currently drilling at a depth of 1,925 metres. The well is being drilled to evaluate a prospect with multiple potential reservoir units in sediments of Carboniferous age. The upper portion will be an appraisal well targeting a structure defined by 3D seismic with stacked reservoir units in the Bashkirian and Upper Serpukhovian sections that tested natural gas elsewhere within the Makeevskoye field. The deeper portion will be an exploration well crossing a fault to test a deep structure to evaluate the hydrocarbon potential of deeper formations in the Lower Serpukhovian and potentially in the deeper Visean sections. A discovery in these deeper sediments would open up new opportunities for reserve and production growth.
Contingent Resources of natural gas (net to the 70% interest of KOV) for the Bashkirian and Upper Serpukhovian zones underlying the M-16 location, as evaluated by the Company's third party engineering consultants and as arithmetically totalled by the Company, range between a Low Estimate (1C) of 9 billion cubic feet ("Bcf") and a High Estimate (3C) of 92 Bcf with a Best Estimate (2C) of 38 Bcf when rounded to the nearest Bcf.
In addition, Prospective Resources of natural gas (net to the 70% interest of KOV) for the Lower Serpukhovian zone in the M-16 prospect, as evaluated by the Company's third party engineering consultants and as arithmetically totalled by the Company, range between a Low Estimate (1C) of 11 Bcf and a High Estimate (3C) of 94 Bcf with a Best Estimate (2C) of 41 Bcf when rounded to the nearest Bcf.
The M-20, NM-1 and M-16, and the producing wells, are operated by KUB-Gas LLC ("KUB-Gas"), a partially-owned subsidiary in which KOV has a 70% effective ownership interest. Average production during the month of August from the KUB-Gas wells is approximately 22.9 MMcf/d (16 MMcf/d net to KOV). Gas price for the month of August is US$11.75.