It is planned to conduct workovers on the AKK05 and AKK14 wells in Q3 in order to boost gas production and short-term cash flow. These wells have successfully tested gas in the past but were not brought on stream due to the relatively low gas price at that time.
Commencing in Q4 up to five further shallow gas exploration wells are expected to be drilled on a number of additional prospects and leads which have been identified based on seismic data. These are relatively low risk targets and of the 13 shallow exploration wells previously drilled by Tethys in the Akkulka Block, 11 tested commercial gas.
The planned gas exploration wells are typically 600-800 meters measured depth and will take up to three weeks each to drill. Currently these are located mainly in the central and south-eastern part of the Akkulka Exploration Contract and relatively close to existing gas infrastructure.
The KBD01 (Kalypso) comprehensive testing programme initially on the Permo-Carboniferous interval will commence in Q3. The programme will involve initial perforation and potentially acidisation followed by fracture stimulation of the carbonate interval approximately 4,100 meters below the surface and will take up to one month to complete. Electric logs run over this section indicated more than 100 metres of gross potential hydrocarbon bearing zones in what is interpreted to be shelf limestones with hydrocarbon shows also being noted whilst drilling. The Kalypso Permo-Carboniferous is likely to be gas condensate bearing with 122 billion cubic feet (3.5 billion cubic metres) gross mean unrisked recoverable prospective resources attributed to it by Gustavson & Associates. Further potential lies in the Jurassic sands which showed indications of oil when drilling and on electric logs.
The two-year extension to the Kul-Bas Exploration and Production Contract area has now been successfully obtained by Tethys at the Ministry of Oil and Gas in Astana and as such the exploration phase of this contract will now run until November 11, 2015 assuming no further extensions are given.
200 kilometres of 2D seismic is planned in Q3 over identified prospects in the south-west part of the Kul-Bas block, separate from Kalypso.
An additional seismic programme of 100 square kilometres of 3D data is planned over further prospects identified north west of the producing Doris wells and with similar Cretaceous reservoirs predicted. Furthermore an additional 35 kilometres of 2D data is planned for acquisition within the Akkulka block, but targeting additional areas of interest around the shallow producing Kyzyloi gas field. This activity is likely to follow the Kul-Bas seismic acquisition programme.
The total CAPEX for this program, with the drilling of two oil exploration wells, seismic, testing of KBD01, drilling of five shallow gas wells and workovers totals approximately USD20.4 million and is expected to take the rest of this year and into H1 2014.
Aral Oil Terminal
On June 6, 2013 Phase 2b of the Aral Oil Terminal ("AOT") expansion was inspected by the State Commission of the Republic of Kazakhstan. The Phase 2b expansion consists primarily of an additional 12,500 barrels of crude oil storage capacity. This additional storage capability will greatly enhance the efficiency of oil transhipment through the terminal which has been suffering of late due to lack of storage associated with offtake issues from the terminal. These issues, although now solved, did affect the volumes of oil which were able to transit through the terminal. Furthermore, Phase 3 expansion of AOT, which will see the installation of an electrical dehydrator to significantly improve the quality of oil, will be undertaken when Phase 2b has been formally signed off. Phase 3 expansion is expected to be commissioned and operational in Q3 of this year.
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