Heritage Oil PLC has discovered as much as 12.3 tcf of gas on the Miran West structure in Iraqi Kurdistan and is evaluating development options under which production could start into European markets as early as 2015 using planned regional infrastructure.
Heritage, placing the value to the company at $2.7 billion, described Miran as the sixth largest gas field discovered in Iraq and the largest gas field to be discovered in the country for more than 30 years.
Heritage noted that the Miran West-2 well was initially designed as an appraisal well for the Cretaceous section and was modified later to assess the exploration potential of deeper formations. Drilled to a total depth of 4,426 m, it confirmed three additional pay zones in Lower Cretaceous and Jurassic formations in addition to the pay zone identified in the Upper Cretaceous in the Miran West-1 well.
Well results also established that Miran contains two hydrocarbon systems, with oil in the shallower Upper Cretaceous section and wet gas-condensate in the Lower Cretaceous and Jurassic formations.
Heritage said, "This has resulted in the previously anticipated prospective oil resources in the Lower Cretaceous, identified on the basis of oil shows in the Miran West-1 well, being proven to be wet gas-condensate" (OGJ Online, Nov. 19, 2010).
Management estimated that the Miran West structure has 6.8 to 9.1 tcf of gas in place at 90% to 50% probability plus 42-71 million bbl of condensate and 53-75 million bbl of oil. There is a 10% chance of 12.3 tcf of gas in place.
Heritage summarized the test results:
• Jurassic at 3,465-3,533 m measured depth flowed 26 MMscfd of gas and 70 b/d of 52.2° gravity condensate on a 40/64-in. choke.
• Jurassic at 3,327-3,410 m flowed 25.5 MMscfd of gas and 67 b/d of 54.3° gravity condensate on a 40/64-in. choke.
• Jurassic at 2,992-3,115 m flowed 26.7 MMscfd of gas and 432 b/d of 60.9° gravity condensate on a 40/64-in. choke.
• Lower Cretaceous at 2,117.5-2,220 m flowed 200 Mcfd of wet gas.
• Upper Cretaceous at 714-1,000 m tested a trace of oil on pump.
Surface equipment capacity constrained the test rates. Test data indicate that individual test intervals could produce at rates of 40 MMscfd with the well capable of delivering at a rate of more than 100 MMscfd when placed on production, Heritage said.
The proven hydrocarbons in the Upper Cretaceous can be accessed commercially on the structure as demonstrated by the 8,000-10,000 b/d potential of the Miran West-1 well, Heritage added. Drilling techniques will maximize the benefit from the fracture networks to achieve optimal production rates.
Extensive coring and wireline log analysis at Miran West-2 indicated the presence of matrix porosity in the Cretaceous and Jurassic formations. Management estimated that Heritage has discovered mean risked contingent and prospective resources in Miran West and Miran East of 744 million bbl of oil equivalent based on a 75% working interest.
Results of drilling and early indications from 3D seismic indicate pervasive fracture networks across the Miran structures. Heritage plans to drill the Miran West-3 high-angle appraisal well in the second quarter of 2011. It will source a second rig by autumn of 2011 to continue Miran West appraisal and later to begin exploratory drilling at Miran East.
Heritage will expand the 550 sq km 3D seismic survey that is under way by a further 180 sq km. The expansion is aimed at the southern flanks of the Jurassic and Cretaceous structures.
Miran's location in Kurdistan makes it ideally placed to gain access to secure and profitable European gas markets, Heritage said. In the last 2 years Austria's OMV, Hungary's MOL, and Germany's RWE have signed agreements with Kurdistan to create a route to market for Kurdistan gas reserves.
Heritage said it is considering development options that could include either bringing gas into Turkey and-or into Europe via the Nabucco pipeline.
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