SAINT HELIER, Jersey, May 15, 2014 /PRNewswire/ --
LONGREACH OIL AND GAS LIMITED (TSXV: LOI) (the "Company" or "Longreach") has encountered two prospective natural gas zones with its Kamar-1 well on the Kechoula structure, located in the Sidi Moktar licence in the Essaouira Basin of Morocco. One zone was in the targeted Lower Liassic formation and the other in the Lower Dogger/Upper Liassic formations.
"These are very promising exploration results from our second Moroccan well, which adds vital, new technical evidence to our growing understanding of the large resource potential in the Kechoula structure. Most importantly, our Kamar-1 well did not encounter any bottom water, which is excellent news for Longreach shareholders and our Moroccan partners," said Dennis Sharp, Longreach's Executive Chairman.
The Kamar-1 well was drilled to a final total depth of 2,790 metres and intersected two distinct gas-bearing intervals. One is in the targeted Lower Liassic natural gas zone and has a gross interval of 110 metres as defined by petrophysical, wireline logs. The other is defined by the presence of significant natural gas volumes in the drilling mud within the Lower Dogger/Upper Liassic zone, which occurs over a gross interval of approximately 100 metres.
"The absence of water in the Lower Liassic formation at the Kamar-1 location adds credence to our previous hypothesis that the incursion of abnormally high-pressured salt water in the Koba-1 well is localized and not an indication of water present in the bottom of the Lower Liassic formation throughout the Kechoula structure," Sharp said.
Kamar-1 was drilled following a disciplined path that capitalized on the lessons learned in Koba-1, which was drilled in late 2013 at a location four kilometres to the northwest. Kamar-1 intersected the Lower Liassic at a depth of 2,132 metres, where, after penetrating some 30 metres, drilling was halted in order to obtain intermediate logs. These logs were interpreted and a number of gas-bearing intervals were selected to test for flow rates, pressures and composition. However, the wireline-conveyed testing equipment was unable to obtain conclusive data about potential flow rates. Once completed, drilling resumed until the total depth of 2,790 metres was achieved and then a final suite of petrophysical logs, acoustic check-shot data and selected side wall cores were obtained.
These data are currently being processed, reviewed, analysed and integrated with the Koba-1 results for the purpose of designing an extensive formation testing program over the gas-bearing intervals encountered at both the Koba and Kamar wells. Contingent on the results of this testing program, a follow-up 3-D seismic program aimed at better identifying potential appraisal drilling locations is planned.
Delineating and defining a hybrid natural gas reservoir
Longreach's exploration mapping, drilling, logging and core samples data are continuing to define the Kechoula gas-charged structure as geologically complex. Rock sample analyses to date show an internal geological character containing sedimentary beds that are porous and permeable, representing traditional conventional reservoirs, interbedded with tighter sandstones, or unconventional reservoirs that typically span extensive areas and have the potential to yield long productive lives.
Longreach believes it has encountered a hybrid reservoir that holds substantial resource potential. Unlocking this potential requires a comprehensive technical approach, employing both conventional and unconventional reservoir completion techniques of the type that have underpinned North America's recent oil and gas production revolution.
Reservoir evaluation continues alongside plans to secure financing for future operations
Evaluating Longreach's first two exploration wells and the Kechoula structure represents the initial work in the Company's four-step process to creating sustainable, economic value from prospective reservoirs. The Longreach approach to value creation is founded in: 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. The Company's Moroccan value creation work is at the early stages of this well-established and well-recognised methodology - a disciplined process that has seen the Company's Canadian technical team generate repeated economic success in a series of companies across the Western Canada Sedimentary Basin over the past 30 years. The Company's next steps in Morocco are expected to include continued evaluation of exploration results to date, which will help define future field work and program plans. Longreach is also planning to conduct financial planning to source the capital required to fund continued work to fully understand the Kechoula structure - essential work that will help set the foundation for potential natural gas production for Longreach and its Moroccan partners at Kechoula and other prospects within the Sidi Moktar acreage.
Longreach is an independent Canadian oil and gas company focused on its significant land position in Morocco. The Company has a 50 percent operated interest in the Sidi Moktar licence 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 continued absence of water at the bottom of the Lower Liassic formation throughout the Kechoula structure; the ability of the Company to conduct a follow-up 3-D seismic program; the ability of the Company to successfully verify the potential of the Kechoula structure; the ability of Longreach to successfully employ the four-step process of exploration methodology at its exploration wells and the Kechoula structure to allow management to repeat the success enjoyed in the Western Canada Sedimentary Basin; and the ability of the Company to source the capital required to fund continued work to fully understand the Kechoula structure. 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; 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 employ its process of exploration methodology at its exploration wells 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.
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Chief Financial Officer and Secretary
SOURCE Longreach Oil and Gas Limited