|By PR Newswire||
|April 23, 2014 02:01 AM EDT||
SAINT HELIER, Jersey, April 23, 2014 /PRNewswire/ --
Leveraging the lessons of the Koba-1 exploration well in North Africa
LONGREACH OIL AND GAS LIMITED (TSXV: LOI) (the "Company" or "Longreach") is about to drill into the targeted Lower Liassic formation, the first prospective zone, with the Company's second Moroccan exploration well - Kamar-1 - on the Sidi Moktar onshore licence.
"We have set intermediate casing in Kamar-1 at approximately 1,960 metres of total vertical depth (TVD). Kamar-1 is a key evaluation well that should add considerable knowledge to our on-going assessment of the resource potential of the highly prospective Kechoula structure located in our Sidi Moktar license in the Essaouira Basin in Morocco. As expected, our drilling team encountered increasing gas content in the mud column as the Kamar-1 drill bit approached the Lower Liassic formation. Given the results of our first Moroccan well drilled in late 2013 into the Kechoula structure - Koba-1 - this gas content increase in Kamar-1 was anticipated. Based upon our detailed technical audit of the drilling of Koba-1, we have modified our Lower Liassic drilling and evaluation program and have the procedures in place at Kamar-1 to capture the necessary petrophysical data that will help map our path to exploration understanding and potential success. We expect to drill into and log the Lower Liassic zone over the next few weeks," said Dennis Sharp, Longreach's Executive Chairman.
Methodically exploring Kechoula step-by-step
The Kamar-1 drilling and evaluation plan is to drill into the Lower Liassic, but to stop short of intersecting the analogous depth where Koba-1 encountered what, based upon technical data, the Longreach team believes is a series of fractures and the source of an influx of abnormally high-pressure water that interrupted the collection of a full suite of reservoir measurements in the Company's first well. At Kamar-1, Longreach plans to penetrate the top of the formation, stop drilling to log and obtain gas samples and side wall cores. By using this methodical approach, the team plans to obtain data on natural gas saturations, gas composition, formation pressures, reservoir porosity, gross and net pay thickness and potential deliverability. This step-by-step incremental approach is designed for Longreach to acquire the petrophysical data that it was unable to gather in the Koba-1 well and to verify the potential of the Kechoula structure.
Capitalizing on and leveraging the lessons of Koba-1
The Longreach technical team, led by Vice President of Exploration Tom Feuchtwanger, is capitalizing on the extensive technical knowledge acquired while drilling Koba-1, which tapped the Lower Liassic formation and encountered an estimated 45 metres of gas-charged sands. The Kamar-1 surface location is about four kilometres southeast of Koba-1, and is expected to intersect the Lower Liassic at a deeper (200 metres) depth than at Koba-1. Longreach believes that proving the existence of a quality reservoir and natural gas at this down-dip location would make the large Kechoula inversion structure highly prospective. This confirmation would form the foundation for an extensive production testing program of Koba-1 and Kamar-1.
"We are following a disciplined, meticulous plan that continues to improve our understanding of the Kechoula potential. Each well is a technical building block to value creation. While there is always anticipation of enormous success early in any exploration program, extracting full value is a longer game that rewards patience and learning from each well, log, evaluation and interpretation," Sharp said.
Crafting exploration and reservoir evaluation success
The Longreach technical team employs a proven, four-step process to creating sustainable, economic value from prospective reservoirs. In management's view, successful exploration, development and value creation is built upon: 1) understanding the reservoir, 2) designing a recovery method that maximizes value, 3) implementing cost-effective development and 4) generating sustainable netbacks using sustainable practices. Longreach's Moroccan exploration is at the early stages of this well-established methodology - a rigorous process that has seen the Company's Canadian technical team generate repeated economic success in a suite of companies across the Western Canada Sedimentary Basin over the past three decades. This accomplished record of commercial and technical success has unlocked enormous value from diverse reservoirs producing a variety of hydrocarbons ranging from high-pressure sour natural gas in complex and fractured mountain geology to expansive bitumen resources encased deep underground in sand. Longreach is deploying parallel practices and procedures in pursuit of unlocking value from the Kechoula structure.
Longreach is an independent Canadian oil and gas company focused on its significant land position in Morocco. The Company has a 50% operated interest in the Sidi Moktar license area covering 2,683 square kilometres and is working closely with ONHYM as a committed long-term partner to unlock the hydrocarbon potential of the region. Morocco offers a politically stable environment to work within and has favourable fiscal terms to energy producers. Longreach is a public company listed on the TSX Venture Exchange under the symbol "LOI".
Special Note Regarding Forward Looking Statements
This press release contains forward-looking statements. Such forward-looking statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "project", "potential", "targeting", "intend", "could", "might", "continue" or the negative of these terms or other similar terms. Forward-looking statements in this press release include, but are not limited to, statements regarding the drilling of the Karmar-1 well at the Company's operated Sidi Moktar onshore license area in Morocco; the ability of the Company to successfully complete the drilling program at Kamar-1 over the next few weeks; the ability of the Company to avoid intersecting the analogous depth where Koba-1 encountered technical issues in its drilling program; the ability of the Company to successfully penetrate the top of the formation, obtain gas samples and side wall cores; the ability of the Company to successfully verify the potential of the Kechoula structure; the ability of the Company to intersect the Lower Liassic at a deeper depth than experienced at Koba-1 and to confirm the prospective nature of Koba-1; and the ability of Longreach to successfully employ the four-step process of exploration methodology at Koba-1 and the Kechoula structure to allow management to repeat the success enjoyed in the Western Canada Sedimentary Basin. Forward-looking statements are only predictions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to: general economic conditions in Canada, the Kingdom of Morocco and globally; completing the proposed drilling program at Kamar-1 in a timely and fiscally prudent manner; industry conditions, including fluctuations in the price of oil and gas, governmental regulation of the oil and gas industry, including environmental regulation; fluctuation in foreign exchange or interest rates; risks inherent in oil and gas operations; political risk, including geological, technical, drilling and processing problems; unanticipated operating events which could cause commencement of drilling and production to be delayed; the need to obtain consents and approvals from industry partners, regulatory authorities and other third-parties; stock market volatility and market valuations; competition for, among other things, capital, acquisitions of reserves, undeveloped land and skilled personnel; incorrect assessments of the value of acquisitions or resource estimates; any future inability to obtain additional funding, when required, on acceptable terms or at all; credit risk; changes in legislation; any unanticipated disputes or deficiencies related to title matters; dependence on management and key personnel; and risks associated with operating in and being part of a joint venture. Although the forward-looking statements contained in this press release are based upon factors and assumptions which management of the Company believes to be reasonable, the Company cannot assure that actual results will be consistent with its expectations and assumptions. Material factors and assumptions which management of the Company has considered in connection with making the forward-looking statements in this press release include that the Company will be able to successfully complete the drilling program at Kamar-1 and to successfully employ its process of exploration methodology at Kamar-1 and the Kechoula structure. Undue reliance should not be placed on the forward-looking statements contained in this news release as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. These statements speak only as of the date of this press release, and the Company does not undertake any obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Longreach in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933 (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration is available.
For further information:
Chief Financial Officer and Secretary