WesternZagros Resources Ltd. announces the approval of the Garmian Block Field Development Plan ("FDP") from the Kurdistan Regional Government ("KRG") and the submission of the Kurdamir Block FDP. Both blocks are located in the Kurdistan Region of Iraq.
Garmian Block Field Development Plan Approval
WesternZagros and its co-venturer, Gazprom Neft Middle East B.V. ("Gazprom Neft"), have received approval for the Garmian FDP for the Sarqala Field from the KRG.
"This approval is a key milestone for WesternZagros and reconfirms our commitment to continue to grow the Company," said Simon Hatfield, Chief Executive Officer of WesternZagros.
The Garmian FDP is focused on the development of the Jeribe / Upper Dhiban reservoir which is estimated to contain 13 million barrels ("MMbbl") of 2P oil Reserves and 66 MMbbl of unrisked P50 Prospective oil Resources (both Gross Block). The first phase of development includes the continuation of production from the Sarqala-1 well, and the drilling of two additional development wells to increase production and to convert prospective resources into reserves.
Since production began, the Sarqala-1 well has produced over 3 MMbbl of 40 degree API, light oil with no formation water and no hydrogen sulphide. The field is currently producing approximately 5,000 barrels per day ("bbl/d") of oil from Sarqala-1 through the existing surface facility which has the capacity of up to 15,000 bbl/d.
The Sarqala-2 well is anticipated to spud in the first half of 2017 and is planned to target a fractured portion of the reservoir identified on the 3D seismic. The Sarqala-3 well will follow with similar objectives. The potential for further development of the Jeribe / Upper Dhiban reservoir will be assessed following the results from this first phase.
Kurdamir Block Field Development Plan Submission
WesternZagros and its co-venturer, a subsidiary of Repsol S.A., Talisman (Block K44) B.V, ("Repsol"), have submitted a FDP to the KRG to develop the significant oil and gas resources discovered on the Kurdamir Block.
"We are encouraged by Repsol's leadership on this project and the submission of the FDP is a significant step forward to extract value from our Kurdamir discovery," said Simon Hatfield.
The Kurdamir FDP is a phased development that will be executed over a period of several years. Phase 1 is focused on the development of the Oligocene oil and gas discovery and includes a central processing facility shared equally between the Kurdamir Block and Repsol's adjacent Topkhana Block. The facility will have a capacity of 150 million standard cubic feet of gas per day with liquids handling for condensate and oil. Repsol is the operator of both the Topkhana and Kurdamir blocks.
The co-venturers and the KRG continue to negotiate a gas sales agreement to provide Phase 1 gas from the Kurdamir and Topkhana blocks to the domestic market. In addition, the KRG is responsible for the construction of a gas pipeline from the Kurdamir/Topkhana block boundary to a tie in point at Chemchemal. A final investment decision to advance the project is anticipated upon completion of the gas sales negotiations, the pipeline engineering, procurement and construction award and approval of the FDP.
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