WesternZagros Resources says that Kurdamir-1 has reached an intermediate depth of 2,601 metres, and has drilled through the Oligocene and Pilaspi/Jaddala reservoir targets in the Tertiary. Logging and coring activities were completed in the Tertiary interval and two open hole drill stem tests conducted. In addition, as drilling and coring progressed through the Tertiary interval, the Kurdamir-1 well encountered challenges related to wellbore instability in fractured carbonates which resulted in the need to undertake two sidetrack operations in order to reach the current intermediate depth.

Highlights of activities in the Tertiary interval included:

• After setting the 11 3/4" casing at 2,050 metres, Kurdamir-1 reached the top of the Tertiary carbonate reservoir at 2,140 metres. Hydrocarbon shows were encountered as drilling progressed through this reservoir.

• Two cores were cut between 2,305 metres and 2,332 metres which exhibited hydrocarbon shows. Logging results indicated a gross hydrocarbon pay of 168 metres, penetrated from the top of the porous Tertiary carbonate reservoir at 2,144 metres to the base of the porous reservoir at 2,312 metres.

• Two drill stem tests were conducted between 2,195 metres and 2,235 metres and between 2,280 metres and 2,352 metres. Combined test rates indicate approximately 27.5 million cubic feet per day of gas and 1,172 barrels per day of 61 degrees API natural gas liquids (condensate). Test rates were limited due to testing equipment restrictions; however, initial well test analysis conducted by an independent third party indicates that reservoir production potential of approximately 52 million cubic feet per day of gas and 2,240 barrels per day of condensate could be expected from these intervals. No formation water was recovered during the testing.

• Up to 0.6% H2S gas was detected during the test and all necessary safety precautions were taken during testing operations.

• As no porous reservoir was encountered below 2,312 metres, it is uncertain whether the gas and condensate encountered is in a gas cap, associated with a deeper oil column downdip on the flanks of the structure, or in a non-associated accumulation without any oil downdip.

• WesternZagros is currently working with its external evaluators in order to provide resource estimates associated with the Tertiary interval at Kurdamir-1. These results will be forthcoming once this work has been completed.

The forward program at Kurdamir-1 is to drill ahead and set the 9 5/8" casing in the Aaliji Seal prior to targeting the Shiranish and Upper Qamchuqa reservoir intervals in the Cretaceous. Total depth for Kurdamir-1 is planned to be in the range of 3,600 metres to 4,000 metres, and it is now anticipated that this target depth will be reached in the first quarter of 2010. Gross well costs are anticipated to be between $60 million and $65 million, prior to any additional testing.

Simon Hatfield, CEO of WesternZagros said,"We're encouraged about this initial discovery at Kurdamir-1 which confirms the presence of hydrocarbons in good quality Oligocene reservoir in the northern part of our block. We look forward to drilling ahead to test the hydrocarbon potential in the Cretaceous reservoirs."

The Minister of Natural Resources for the Kurdistan Regional Government, Dr. Ashti Hawrami, said,"This is an important discovery for the Kurdistan Region and I'm pleased with the results at Kurdamir-1 to date. Discoveries such as this will accelerate the development of gas and gas condensate resources in the Kurdistan Region."

Tags: WesternZagros Resources Ltd.