Tethys Petroleum Ltd. announced in a press release an update on its Kazakhstan drilling schedule, which was previously announced as part of the Kazakhstan work program through 1Q 2014.

The extended and accelerated drilling program includes:
• Two deep exploration wells to be drilled simultaneously;
• The AKD08 (“Doto”) exploration well, located between the Doris and Dione oil discoveries, to be drilled deeper with an additional Triassic target;
• The new AKD09 (“Dexa”) exploration well, which will target the sand channel to the north of the Doris discovery; and
• The shallow gas well program, which is accelerated to now drill five wells back to back.

The Doto and Dexa wells will be drilled simultaneously, providing significant cost savings and exposure to two potentially high-impact prospects this year, Tethys said in the press release.

The Doto exploration well is located to the southwest of the producing Doris field and north of the Dione oil discovery. It is designed to target several potential zones including the Lower Cretaceous sandstone and Upper Jurassic carbonate sequences as proven in Doris. After significantly more interpretation being carried out over the summer, the well also will target the deeper Triassic sequence, which had very good hydrocarbon shows in other wells in the near vicinity, including the AKD01 well (Doris oil discovery), according to the press release.

Prospectivity also may exist in the Jurassic sandstone sequence, which flowed oil in the Dione well. The Doto prospect has 22 MMbbl of gross mean unrisked recoverable prospective oil resources attributed to it in the Cretaceous and Upper Jurassic sequences, according to the press release. The deeper Triassic sequence has not been independently assessed as yet. Therefore, the company is unable to quote a reportable resource estimate for this horizon, but it believes it to be an attractive prospect.

This well is planned to commence drilling operations in early September and is forecast to take approximately 70 days to drill to a planned total depth of 3,500 m (11,483 ft) using Tethys’ own ZJ70 Telesto rig, according to the press release.

The Dexa exploration/appraisal well is located to the northwest of the producing Doris field and is designed to target Lower Cretaceous channel sandstone sequences similar to the current major producing unit in the Doris field. The Dexa prospect has 14 MMbbl of gross mean unrisked recoverable prospective oil resources attributed to it, according to the press release. This well is planned to commence drilling operations at the end of September and is forecast to take approximately 45 to 50 days to drill to a planned total depth of 2,400 m (7,874 ft) using Tethys’ own ZJ30 Tykhe rig, which is no longer needed in Tajikistan and is being mobilized from there.

Both prospects offer relatively low risk exploration/appraisal opportunities and are the two closest currently identified exploration/appraisal targets to the Doris oil field itself, Tethys said in the press release.
On the Doris field itself further analysis of the producing wells is under way prior to the installation of artificial-lift equipment and improvements in fluid handling planned for September. This work has resulted in production levels being temporarily reduced. Currently, the field is producing some 2,600 b/d of oil, and further work is under way. Once the work is completed, production is planned to return to over 3,500 b/d of oil, according to the press release.

Commencing in late September/early October five further shallow gas exploration wells are expected to be drilled consecutively 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 last 13 shallow exploration wells previously drilled by Tethys in the Akkulka block, 11 tested for commercial gas, according to the press release. This accelerated program will continue into the first half of 2014.

The planned gas exploration wells are typically 600 m to 800 m (1,969 ft to 3,625 ft) measured depth and will take up to three weeks each to drill. Currently these are located mainly in the central and southeastern part of the Akkulka Exploration Contract and relatively close to existing gas infrastructure and the Akkulka Production Contract area, Tethys said.

Tethys has refocused some of its investment into accelerating gas development and exploration after the significant increase in the realized gas price in January. Current gas production is approximately 380,000 cu m/d (13.6 MMcf/d), the company said. The new Kazakhstan-China gas trunkline under construction (planned to pass through Tethys’ contract areas) will provide an additional commercialization route and offers potential further price upside.

Overall infrastructure in the field area also is improving. A new railway is now under construction with a new rail station planned to be built 70 km (43 miles) from the Doris oil field and 23 km (14 miles) from the nearest Akkulka gas well, according to the press release.