Skyland Petroleum Limited (SKP) is pleased to announce the completion of its acquisition of a 20% interest in the Block XIG Production Sharing Contract ('PSC') in the Republic of Georgia.
In November 2015, the Company signed an agreement with its local partner, Georgia Oil & Gas Limited ('GOG'), to acquire a 20% stake in the Block XIG licence. This transaction has now completed.
The Company is now working in collaboration with GOG under the Block XIG PSC. GOG is the majority owner and operator. The PSC in relation to Block XIG is secured in place until 2037.
Operational Update:
In addition, the Company is pleased to report that drilling operations have been completed on the exploration well Kumisi #2. This well was located based on a seismic survey acquired by targeting multiple zones in Block XIG. The well reached a total depth of 2,357 metres. Petrophysical evaluation of the wireline logs indicates two potential oil bearing zones in the intervals from 1,787 to 2,015 metres. The lithology of the lower zone appears to be sand with an average porosity of 19%.
The upper zone appears to be Middle Eocene volcanoclastic sediments and limestones (as in the surrounding oilfields) and the Company believes the zone may contain oil bearing intervals associated with natural fractures.
A multi-zone testing programme is now commencing which will involve both conventional testing and the drilling of a high angle (sub-horizontal) sidetrack to intersect multiple fractures in the upper zone. This is an established technique in the area and this same equivalent zone is oil productive in the nearby West Rustavi and Samgori oilfields.
The total testing programme is estimated to take some 7 to 8 weeks, and if successful, it should be possible to bring on production within a short period.Dr. David Robson, the Company's Chairman and Managing Director, commented, 'We are pleased to be announcing the completion of the Block XIG transaction following the final approval of our listing on the ASX.
Since inception, we have gained solid ground in a challenging environment and will continue to grow our portfolio. Our initial aim is to establish short-term cash flow from low cost assets and Block XIG represents an attractive low cost acquisition with significant levels of exploration upside. We look forward to the production testing results of Kumisi #2 and moving forward on our work programme with our Georgian partners.'
