TIDMZEN
RNS Number : 7527Z
Zenith Energy Ltd
19 December 2017
December 19, 2017
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon
publication of this announcement via a regulatory information
service ("RIS"), the inside information contained in this document
is now considered to be in the public domain.
ZENITH ENERGY LTD.
("Zenith" or the "Company")
Zardab Field 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 provide an operational update on wells Z-28 and Z-21 in
the Zardab field, Azerbaijan.
High-impact workover of well Z-28
The Company confirms that it has cleaned out well Z-28 to reach
the top of the slotted liner at a depth of 3574 metres. The top of
the tubing can now be cleaned to total depth ("TD") at 3944 metres.
As announced by Zenith on November 20, 2017, the inside of the
tubing has been cleaned out to the depth of 3582, 14 metres deeper
than the reported liner top (3568 metres) in the original well
data. Zenith's operational team views this as a major
accomplishment in the context of the well intervention,
particularly as this was achieved following successful fishing
operations, including the running in hole of a free point tool,
enabling the tubing to be cut and jarred. Once this was carried
out, Zenith's operational team ran in the production tubing to a
depth of 3574 metres, set the wellhead and fully completed the
rigging down process of the ZJ30 truck-mounted workover rig on
December 18, 2017. The Z-28 wellsite is now clear and preparations
have been completed to run a coiled tubing unit ("CTU") to TD from
the top of the slotted liner.
In the post-workover inspection of the wellhead, Zenith's
petroleum engineers observed a leak during a pressure test from the
wellhead in the 9 5/8 inches casing seal assembly.
To resolve this problem, the Company has contracted a UK-based,
worldwide leader in oilfield leak-sealing technology, with an
established presence in Azerbaijan. Zenith has been informed that
various resin compounds will be required to successfully seal the
wellhead following an engineering study currently underway by the
aforementioned company. Zenith expects the estimated completion
time of this study to be delayed by the upcoming holiday season in
the United Kingdom and Azerbaijan, and to have fully completed the
workover of well Z-28 by the end of January 2018.
The Company's operational team is highly committed to completing
the Z-28 high-impact workover successfully and without incident.
The risk of compromising the integrity of the wellhead by running
the CTU to TD, specifically with the leaks from the casing on the
wellhead observed, has been determined to be an imprudent risk that
may have endangered the success of the Z-28 workover and resulted
in a blowout.
The Company will provide an update when the wellhead leaks are
fully sealed and the CTU has subsequently been mobilised and run in
the hole.
High-impact workover of well Z-21
The Company confirms that civil works on the roads to well Z-21
and at the well location have been fully completed.
The average wellhead pressure recorded has increased from 3675
psi, announced by the Company on November 20, 2017, to a current
average shut-in tubing and shut-in annulus pressure reading of 4115
psi.
Zenith's operational team is currently mobilising a workover rig
to the wellsite to begin the high-impact workover of well Z-21
without delay.
The Company will provide an update when the workover of well
Z-21 begins following the mobilisation of all necessary
equipment.
Mike Palmer, Chief Operating Officer, Zenith Aran, the Company's
Azerbaijan-based fully owned subsidiary, commented:
"I know that operations at Z-28 may appear to have taken a long
time. However, from the outset there was relatively little in terms
of data on this well, and we have progressively established that
what data we had was incorrect. From all the work we have done we
now understand this well, specifically the downhole configuration,
characteristics and behaviour. Indeed, from what our team has seen
in well Z-21 it is clear that there is a very strong prospective
pressure in the formation that these wells produce from. We are
convinced that there is a big prize to be had once we finish. We
have been good stewards with the money invested in the operations
so far and have accomplished a great deal in overcoming a number of
difficult challenges thrown at us at significant depths. If it
wasn't for the wellhead leaks we would actually be in a very good
position to complete operations at Z-28, right above the liner with
tubing, ready to drill out with a coiled tubing.
It is unfortunate that the seals for the 9 5/8 casing are not
holding, causing leaks that must be fixed before we can run a CTU
to total depth. We are in contact with one of the top companies in
the world specialised in this. Even though the holidays are upon
us, we will be working with them to come up with a design that will
fix this problem early in January. We are working tirelessly to
make sure we come to a positive conclusion as soon as possible, and
achieve the great production result that we all believe can be
achieved from well Z-28.
I am also pleased that, whilst we wait for the seals to be
completed at well Z-28, we will soon be in a position to begin the
workover of well Z-21.
The entire operational team is fully dedicated to achieving the
best results possible in a field where we know there are extremely
significant quantities of oil to be produced, but where there are
also a number of unforeseen challenges presented by old, deep wells
with inaccurate well data and old infrastructure that needs
repairing."
For further information please contact:
Zenith Energy Ltd.
Andrea Cattaneo
Chief Executive Officer
Email: info@zenithenergy.ca
Tel: +1 (587) 315 9031
Optiva Securities - (Joint Broker)
Christian Dennis
Tel: + 44 (0) 203 137 1903
Beaufort Securities Limited - (Joint Broker)
Jon Belliss
Tel: +44 207 382 8300
Allenby Capital Limited - (Financial Adviser)
Nick Harriss
Nick Athanas
Tel: + 44 (0) 203 328 5656
Yellow Jersey (Financial PR/IR)
Tim Thompson
Tel: +44 (0) 203 735 8825
This information is provided by RNS
The company news service from the London Stock Exchange
END
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