Harvest Natural Resources (ticker: HNR) reported it had commenced drilling the Mafraq South-A (MFS-A) exploration well onshore Oman, the first of a two-well exploratory program. HNR also announced that the mean prospective resources for the targeted south segment total 1.25 Tcf of gas with 46 million barrels of condensate.
The MFS-A well will test the Mafraq South structure, which is a large salt-supported high with stacked reservoir targets in the Barik, Miqrat and Amin reservoirs. The MFS-A well will be drilled to a total vertical depth of approximately 12,000 feet to test coincident fault bounded dip closure at all three reservoir levels, the Barik, Miqrat and Amin. The company estimates the geological probability of success for a discovery in the Barik is estimated to be 28%.
OAG360 Comments:
Right on schedule for the second half of 2011, HNR’s commencement of drilling operations in Oman is a high-impact prospect that OAG360 has been keeping its eye on. The first Oman well, the MFS-A, will test the Mafraq South structure, which is a large salt-supported high with stacked reservoir targets, which we anticipate will provide more than one opportunity for a commercial discovery.
In Oman, Harvest controls 956,000 acres in an Exploration and Production Sharing Agreement (EPSA) in which Harvest has a 100% working interest during the exploration phase with Oman Oil Company retaining the right to back-in to a 20% working interest if natural gas is discovered.
The Oman Ministry of Oil & Gas created Block 64 to generate interest to explore for natural gas. Like many nations in the Gulf region, Oman is attempting to discover and develop natural gas to generate power for industrial diversification. Since oil is priced much higher than natural gas on an energy-equivalent basis, it makes sense for Oman to use natural gas to power non-oil industry while maintaining exports.
The block where Harvest is drilling is offset by Barik, Saih Rawl and Saih Nihayda gas condensate fields containing in excess of 18 TCF and 0.5 billion barrels.
We note that the company estimates that mean unrisked prospective resource for the 13 prospects that the company has identified targeting the Barik and Miqrat formations in Oman is 8.9 TCF gas and 349 million barrels condensate. Below, is a map of HNR’s Oman operations.
Other Exploration Prospects: In Indonesia, HNR’s Lariang LG-1 exploration well encountered multiple hydrocarbon shows and high pressures in the Miocene formation. The well was plugged and abandoned due to high pressures; however, this test well confirmed the presence of oil and natural gas. The rig was moved to test the larger of the two targeted structures in the Budong-Budong prospect. However, on September 22, 2011, HNR reported the KD-1 well’s drill string became stuck at a depth of 8,390 feet. After multiple attempts to break free, the operator severed the drill string, set a cement plug at 7,347 feet and sidetracked the well.
In Gabon, Harvest holds a 66.7% WI in the Dussafu Production Sharing Contract (PSC )offshore Gabon, West Africa. The company spud the DRM-1 well on April 28, 2011 and is being drilled to test the potential of the pre-salt Gamba and Dentale formations. On June 13, 2011 Harvest announced that oil had been encountered in the Gamba formation in a 90 foot oil column with 55 feet of pay and was drilling ahead to the deeper Upper and Lower Dentale formations. The Gamba discovery has been appraised by drilling two sidetracks to test the lateral extent and structural elevation of the Gamba reservoir under a salt ridge; The first sidetrack (DRM-1ST1) 0.75 miles to the southwest found 19 feet of oil pay in the Gamba reservoir, and the second sidetrack (DRM-1 ST2) 0.5 miles to the northwest of the original DRM-1 well found 40 feet of oil pay in the Gamba reservoir. HNR has reported the well will be suspended pending further exploration and development activities.
Click here for the previous write-up on Harvest’s operations.
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