Post Drill Evaluation of Sarikiz field
New log analysis conducted for Extrem Energy clearly shows oil indications within similar intervals to Sarikiz-2 across the depth range 1,414-1,766m. The well conditions at East Sarikiz are suitable for re-entry with Extrem Energy now planning to conduct a further production test at the shallower interval later in 2009. If successful, East Sarikiz will be an additional producing well that will add to early revenues. The estimated drilling and testing investment to appraise the production potential of the well is $0.75 million.
The new log analysis also suggests that the Sarikiz field extends across a wider geographic area than previously interpreted. The estimated area of the fan-delta structure has increased to 6.0square kilometers (km2) (from 4.0km2 stated on March 16, 2009). Using an average thickness of 20m over the additional area and maintaining previous assumptions over the remainder, the estimated total oil in place has increased to 190mbbl. Adopting a 20-35% recovery factor range, the total estimated recoverable oil from the Sarikiz field is in the range 38-66mbbl.
Sarikiz-2 Production Test
The drilling rig was mobilized to site on April 12, 2009 and rigging was completed on schedule on April 17, 2009. Preparatory work continues, but some delay has been experienced as the rig awaits delivery of certain production testing equipment. Production testing is now expected to commence on or before 15 May 2009. Extrem Energy is not liable for the daily rig rate costs during the delay period.
The testing of the 12 levels of sandstone will take approximately one month. The daily production rate achieved will be used to determine the number of wells to be drilled in the field and the capacity of the surface facilities required. Production from the well is expected to be at least 500b/d. Laboratory reports indicate good quality 33.5 API crude oil. The well was cased when originally drilled and will therefore be ready for commercial production following a successful test.
