Gas Plus Khalakan provides operational update on Shewashan field in Iraq

LONDON -- Gas Plus Khalakan (GPK), the operator of the Shewashan oil field in the Kurdistan region of Iraq, is pleased to provide an update on the operations and activity that has been delivered to further develop the Shewashan oil field.

Shewashan #4:

The 4th well drilled on Shewashan field, Shewashan #4, has been completed as a deviated producer in the Qamchuqa reservoir formation only to first extract remaining recoverable oil from this reservoir. There are future plans to recomplete on the Kometan and Shiranish reservoirs. The well was put on production at a rate of 500 bpd and is connected to the early production facilities. The well completion utilized a hydrajet targeted acid stimulation through coiled tubing to enhance production from the fracture network. This is a technique that may now be applied to the other existing wells on Shewashan field to further enhance productivity in the Qamchuqa and Kometan reservoirs.  Water production is approximately 2500 bpd, an amount which is well within the design parameters of the new early production facilities.

Shewashan #1:

The Shewashan #1 well has been sidetracked and a new 4.5-in. liner installed. The well has now being recompleted on the Qamchuqa reservoir formation and is producing 750 bpd on a 24/64-in. choke and is currently water free. This well did not require a hydrajet targeted acid stimulation.

Shewashan #2:

The Shewashan #2 well, which was previously producing 250 bpd from the Shiranish reservoir, is currently being sidetracked as the water isolation program conducted in second-quarter 2017 has resulted in reservoir damage that cannot be repaired.  Production from the well is expected to be further enhanced with the stimulation techniques once a 4.5-in. liner has been installed.

Shewashan #3:

The Shewashan #3 well has been producing at 500 bpd from the Kometan formation but plans are now being made to return the production to the Qamchuqa reservoir utilizing the selective completion already installed in the well.

Oil Sales:

Total oil production for H1 2017 was 292,861 bbl. This amount is significantly below that required to meet forecast annual production targets. The contributory factors were delays associated with drilling Shewashan #4 and the recompletion of Shewashan #1 and #2, trucking and logistics challenges, and water production rates that limited oil production rates until the new early production facilities were installed and completed in June.

In total, cumulative field production to date exceeds 1,250,000 bbl and all invoiced amounts for oil sales have been received. Current total field production is 1,500 bpd. The stabilization of Brent oil prices will allow GPK to operate profitably once the ongoing work overs have been completed.

Budget:

The remaining budget for the balance of the year is approximately $10 million, of which a portion will be offset by revenues associated with production.