TIDMZEN
RNS Number : 9104P
Zenith Energy Ltd
06 September 2017
September 6, 2017
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Azerbaijan Field Rehabilitation Operational Update
Zenith Energy Ltd. ("Zenith" or the "Company") (LSE: ZEN; TSX.V:
ZEE), the dual listed international oil & gas production
company operating the largest onshore oilfield in Azerbaijan, is
pleased to release an operational update regarding the progress of
its field rehabilitation activities in Azerbaijan.
Zenith's field rehabilitation activities in Azerbaijan will
focus on three areas with the final goal of achieving 1000 BOPD by
March 31, 2018. These include a systematic electrical submersible
pump upgrade programme, high impact well workovers in the Zardab
field and the perforation of new productive zones in wells with
significant unexploited potential.
Electrical Submersible Pump ("ESP") Upgrade Programme
As announced by the Company on August 22, 2017, the ESP upgrade
programme involves the progressive replacement of obsolete and
unreliable electrical submersible pumps across 11 wells. Zenith
Aran's operational team has forecast a total increase of 219 BOPD
over existing production across these 11 wells.
These 11 ESP(s) will be procured from Baker Hughes and
Schlumberger, two of the world's leading oilfield technology
companies. This will enable a comparative assessment of the
respective advantages presented by the latest generation ESP
technology manufactured by each company, and will also mitigate the
risk of potential delays in their production and
transportation.
The Company will employ Zenith Aran's upgraded A-80 workover rig
to perform these operations in addition to a similar sized workover
rig operated by an experienced local oilfield service company. It
is anticipated that the ESP upgrade programme will continue until
the end of November 2017 and the Company will provide a final
update once the upgrade programme is completed.
As announced by the Company on August 11, 2017, Zenith is
awaiting delivery of a Schlumberger ESP, custom-built according to
the specifications of well M-195. Delivery is now expected to take
place in late October 2017 with the last consignment of ESPs due to
delays incurred in the procurement process.
The total number of new ESPs installed across the field, once
the ESP upgrade programme is completed and including the new ESPs
installed at wells M-45 and M-195, will therefore be 13.
Zardab High Impact Field Rehabilitation
Zardab is the least developed oilfield in Zenith's REDPSA area.
No significant well interventions have taken place in this field
during the last 20 years.
Zenith's rehabilitation activities will focus on two wells: Z-28
and Z-21, with the possibility of a third well intervention at well
Z-4 in the case of success at either Z-28 or Z-21. These three
wells each produced in excess of 500 BOPD for a very short period
of time before they became plugged-up with sand and ceased
producing.
Z-28 has been selected as the first well in the Zardab field
that Zenith will workover. A number of problems affecting the well
have been identified by Zenith's petroleum engineers in the
pre-workover analysis of Z-28. It has been observed that the tubing
has parted with the tubing top at a depth of 1214 metres and that
it will be necessary to pull the tubing, clean out the well down to
the liner top at a depth of 3692 metres, and subsequently clean out
the liner.
Historically, well Z-28 has experienced significant flow rates
at high pressure. High pressure well interventions require specific
well control equipment such as a blowout preventer ("BOP"), as well
as other well control equipment.
Following a formal tender process in Azerbaijan, the Company has
rented a Chinese manufactured truck mounted ZJ30 workover and
drilling rig with a lifting power of 180 tonnes from an experienced
local drilling company to complete the Z-28 well intervention. This
will be fitted with the required BOP, mud system and fishing
tools.
Zenith's field staff is currently engaged in road construction
and well location improvement works to enable the workover rig and
ancillary equipment to be transported to the Z-28 wellsite.
The workover is scheduled to begin in late September 2017 and
will have a duration of approximately one month. All operations at
well Z-28 will be directed by Zenith's newly recruited Canadian
petroleum engineers, who specialise in complex workover
operations.
Once the workover of well Z-28 is completed, the Company will
move the same workover rig and team to well Z-21 for a similar well
intervention. If successful, a workover of well Z-4 will follow
thereafter.
Identifying and Perforating New Productive Zones
The third part of Zenith's field rehabilitation activities is
identifying and perforating new productive zones across a number of
underexploited wells with the objective of increasing production.
These operations require a significant amount of well data analysis
and preparatory work to be undertaken prior to each perforation.
Preparatory work includes such tasks as road construction for the
transportation of equipment to remote field locations, the cleaning
out of old shut-in wells using a coiled tubing unit (CTU), logging
newly recorded well data, and determining if there is cement behind
the casing. Well perforations will be carried out if it is
determined that there are commercial volumes of oil to produce,
following well data analysis and the identification of new
productive zones.
Zenith's petroleum engineers have identified 3 wells with strong
production potential following such well interventions. These
operations will take place in the period until March 31, 2018.
Production Update
Zenith's current production of oil in Azerbaijan averages
approximately 350 BOPD. This figure takes into account downtime at
a number of producing wells resulting from Zenith's field
rehabilitation programme.
Mike Palmer, Chief Operating Officer, Zenith Aran, the Company's
Azerbaijan-based fully owned subsidiary, commented:
"These are very exciting times for Zenith Aran, we are learning
more and more about the field every day, and determining not only
where we can find the oil to produce, but how this can be achieved
economically. The ESP installations will stabilise our base
production. The work in Zardab, if successful, would not only
significantly increase our production but also help to identify
multiple new drilling locations, as Zardab is sparsely drilled. The
search for new productive zones is a successful strategy that has
been used in other rehabilitation projects in Azerbaijan and is an
economic way to utilise our existing wellbores. However, such work
has never been done in our fields. We have already begun
implementing our three-pronged programme announced today, and I
look forward to the next several months that could prove
transformational towards achieving our operational objectives in
Azerbaijan."
For further information, please contact:
Zenith Energy Ltd.
Andrea Cattaneo
CEO & President
Email: info@zenithenergy.ca
Telephone: +1 (587) 315 9031
Telefax: +1 (403) 775 4474
Allenby Capital Limited - (Joint Broker)
Nick Harriss
Nick Athanas
Richard Short
Telephone: + 44 (0) 203 328 5656
Optiva Securities - (Joint Broker)
Christian Dennis
Telephone: + 44 (0) 203 137 1903
Abchurch (Financial PR/IR)
Tim Thompson
Telephone: +44 (0) 200 7398 7700
This information is provided by RNS
The company news service from the London Stock Exchange
END
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