Oryx Petroleum Announces Appraisal Drilling Update for Demir Dagh in Kurdistan Region of Iraq

Successful tests of targeted Cretaceous and Jurassic reservoirs at Demir Dagh-3; Inconclusive results at Demir Dagh-5

CALGARY, May 19, 2014 /CNW/ - Oryx Petroleum Corporation Limited ("Oryx Petroleum" or the "Corporation") today announces the test results for the Demir Dagh-3 well ("DD-3") and Demir Dagh-5 well ("DD-5") appraisal in the Hawler license area in the Kurdistan Region of Iraq. Oryx Petroleum is the operator and has a 65% participating and working interest in the Hawler license area.

Highlights:

• DD-3
• All four  tests successfully flowed oil with the highest achieved sustained rate exceeding 4,000 bbl/d
• First successful test of Butmah formation in the Lower Jurassic at Demir Dagh
• Second successful test of the Adaiyah formation in the Lower Jurassic at Demir Dagh
• Third successful test of the Cretaceous reservoir at Demir Dagh
• Crude characteristics and porosities similar to other wells drilled at Demir Dagh
• DD-5
• Logging data and drilling fluid losses experienced during drilling indicated the presence of hydrocarbons and a permeable fracture network with matrix porosity similar to other Demir Dagh wells
• Only small quantities of oil flowed to surface during testing due to the inability to re-connect to the permeable fracture network indicated by logging data and losses
• 2014 Demir Dagh Appraisal and Development
• First production on target for this quarter and full year 2014 production guidance unchanged
• Demir Dagh-6 well ("DD-6") recently spudded and expected to reach total depth in early Q3 2014
• DD-6 and four additional development wells to be drilled in 2014 as deviated wells to Lower Cretaceous
• 3D seismic campaign to commence in June 2014

Commenting today, Henry Legarre, Oryx Petroleum's Chief Operating Officer, stated:

"We are very pleased with the results of DD-3. We successfully flowed oil from the well´s primary targets in the Cretaceous and Lower Jurassic reservoirs. The results confirmed the presence of similar crude qualities for all reservoirs tested as experienced at other wells drilled at Demir Dagh. DD-3 is being completed as a Cretaceous producer together with DD-2 and DD-4 and first production will be achieved soon.  Our production guidance for 2014 remains unchanged.

At DD-5 there was evidence of a permeable fracture network, hydrocarbons and matrix porosity similar to observed in the Cretaceous at other Demir Dagh wells. However, the well tested only small quantities of oil as it was unable to re-connect to the permeable fracture network.   DD-5 and DD-3 results will be considered together with results and data obtained from other Demir Dagh appraisal activities in the Corporation´s year end reserves and resources update. 

We have now spudded DD-6 and expect to drill four additional development wells at Demir Dagh this year in order to increase production capacity and continue delineating the field. DD-6 will be the first deviated well in Demir Dagh which is generally dominated by vertically oriented fractures. We anticipate DD-6 will provide greater information regarding the fracture network's characteristics while also allowing us to better access the fracture network for future production."

Demir Dagh-3 Test Results

The Sakson Hilong 10 rig spudded the DD-3 appraisal well in November 2013 approximately 3 kilometres to the South-East of DD-2. DD-3 reached a total depth of approximately 4,400 metres in the Kurra Chine formation in the Triassic in March 2014. Based on core and logging analysis and observations during drilling, including losses, oil on shakers and oil shows on cuttings a multi zone testing was designed. The testing program was comprised of four cased-hole drill stem tests ("DSTs") targeting Cretaceous and Lower Jurassic reservoirs.

Oryx Petroleum successfully flowed oil in both DSTs conducted in the Lower Jurassic.

DST#1 conducted in the Butmah formation in the Lower Jurassic successfully flowed oil at a sustained natural flow rate of 500 bbl/d and water at a rate of approximately 1,250 bbl/d over a period of three days using a 128/64" choke. The well flowed 100% oil at over 3,000 bbl/d during the initial six hour phase of the test, but water appeared later in test indicating the bottom of the interval perforated was close to the free water level. The bottom of the interval perforation was 173 metres from the estimated top of the Butmah formation in the well bore which is down-dip of the Butmah crest. No pressure decline was observed during the test. The crude oil from the Butmah formation was measured on site between 23° and 31° API gravity with an average of 28° API. Hydrogen sulfide was measured at 1.8% in the natural gas phase and small quantities of natural gas were encountered but were unable to be measured. Overall the fluid characteristics of the oil tested in the Butmah was similar to the oil tested in the Butmah formation by the Banan-1 exploration well ("BAN-1"). The DD-2 well was unable to test the Butmah formation due to technical issues.

DST#2 conducted in the Adaiyah formation in the Lower Jurassic successfully flowed over a period of 24 hours using a series of different choke sizes. The maximum sustained flow rate achieved was 4,000 bbl/d of oil for a 6 hour period using a 64/64" choke under natural flow. No pressure decline was observed during the test. The crude oil from the Adaiyah formation was measured on site between 36° and 40° API gravity, similar to crude measured in the Adaiyah and Mus formations tested with DD-2.  Natural gas was measured at 2,040 scf/bbl, also comparable to levels encountered in the Adaiyah at DD-2, and hydrogen sulfide was measured at a relatively high level of 9.0% in the natural gas phase.

Oryx Petroleum also successfully flowed oil in both DSTs conducted in the Cretaceous

DST#3 conducted in the Mergi and Kometan formations in the Upper Cretaceous successfully flowed oil at an average rate of 550 bbl/d over a period of 18 hours using a 128/64" choke size. There was poor connectivity between the well and the reservoir. The crude oil tested was measured on site between 20° and 21° API gravity, similar to crude measured in the Cretaceous formations tested at DD-2 and DD-4.. Natural gas and hydrogen sulfide were encountered but it was not possible to obtain measurements
DST#4 was conducted in the Shiranish formation in the Upper Cretaceous. Oil was successfully flowed over a period of 24 hours using a series of different choke sizes. The maximum sustained flow rate achieved was 3,200 bbl/d of oil for an 8 hour period using a 64/64" choke under natural flow. The crude oil from the Shiranish formation was measured on site between 21° and 22° API gravity, similar to crude measured in the Cretaceous formations tested at DD-2 and DD-4. Quantities of natural gas and hydrogen sulfide were encountered comparable to those encountered at DD-2 and DD-3 with natural gas measured at between 180 to 300 scf/bbl and hydrogen sulfide at 1.6% in the natural gas phase. No pressure decline was observed during the test.

DD-3 is being completed as a producer from the Cretaceous and the Sakson Hilong 10 rig is in the process of moving to Banan to spud the Banan-2 appraisal well.

Demir Dagh-5 Test Results

The Romfor 22 rig spudded the DD-5 appraisal well in early March 2014 approximately 3 kilometres to the west of DD-2 in the saddle between the Demir Dagh and Banan structures. DD-5 reached a total depth of approximately 1,900 metres in the Lower Cretaceous in April 2014. Based on core and logging analysis and observations during drilling, including losses, oil on shakers and oil shows on cuttings a testing program comprised of two DSTs was designed.  Notably logging analysis and observations during drilling indicated the presence of hydrocarbons, a permeable fracture network and matrix porosity similar to that observed at DD-2, DD-3, and DD-4.. Both DSTs flowed small quantities of oil to surface but were unable to re-connect with the permeable fracture networks and achieve sustained flow rates. It was not possible to accurately measure crude qualities or the presence of natural gas and hydrogen sulfide. The results need to be further analyzed but the DD-5 results reinforce the view that the Demir Dagh and Banan are not connected.

All field fluid measurements at DD-3 and DD-5 will require laboratory analysis to confirm results and should be considered preliminary until such analysis has been done. The aforementioned test results are not necessarily indicative of long-term performance or of ultimate recovery.

Remaining 2014 Demir Dagh Appraisal Program

The Romfor 22-rig has now spudded DD-6 from the DD-4 drill pad 1.5 kilometres from DD-2. DD-6 is expected to reach a total measured depth of approximately 2,060 metres in the Lower Cretaceous in Q3 2014. The well is targeting the crest of the Cretaceous reservoir just to the south of the fault running from west to east across the structure between the Demir Dagh-1 well and DD-2. Four additional development/appraisal wells will be drilled in 2014 to the Lower Cretaceous in order to increase production capacity and to further delineate the Cretaceous reservoir. Due to the vertical oriented nature of much of the fracturing evident on logs the next wells will be drilled in a more deviated manner than has been done with earlier wells in order to more optimally access the fracture networks.

The Corporation has recently agreed with a third party seismic provider to acquire 440 square kilometres of 3D seismic covering the Demir Dagh, Banan and Zey Gawra discoveries. The seismic acquisition campaign will commence in June 2014. The data acquired should help the Corporation better understand the three discoveries and determine optimal locations of future appraisal/development drilling.

ABOUT ORYX PETROLEUM CORPORATION LIMITED

Oryx Petroleum is an international oil exploration company focused in Africa and the Middle East. The Corporation's shares are listed on the Toronto Stock Exchange under the symbol "OXC". The Oryx Petroleum group of companies was founded in 2010 by The Addax and Oryx Group Limited and key members of the former senior management team of Addax Petroleum Corporation. Oryx Petroleum has interests in six license areas, two of which have yielded oil discoveries and four of which are prospective for oil. The Corporation is the operator or technical partner in four of the six license areas. Two license areas are located in the Kurdistan Region and the Wasit governorate (province) of Iraq and four license areas are located in West Africa in Nigeria, the AGC administrative area offshore Senegal and Guinea Bissau, and Congo (Brazzaville). Further information about Oryx Petroleum is available at www.oryxpetroleum.com or under Oryx Petroleum's profile at www.sedar.com.

Reader Advisory Regarding Forward-Looking Information

Certain statements in this news release constitute "forward-looking information", including statements related to the Corporation's reserves and resources estimates and potential, drilling plans, development plans and schedules and chance of success, results of exploration activities, future drilling of new wells, ultimate recoverability of current and long-term assets, possible commerciality of our projects, future expenditures, and statements that contain words such as "may", "will", "could", "should", "anticipate", "believe", "intend", "expect", "plan", "estimate", "potentially", "project", or the negative of such expressions and statements relating to matters that are not historical fact, constitute forward-looking information within the meaning of applicable Canadian securities legislation.

Although Oryx Petroleum believes these statements to be reasonable, the assumptions upon which they are based may prove to be incorrect. For more information about these assumptions and risks facing the Corporation, refer  to the Corporation`s annual information form dated March 12, 2014 available at www.sedar.com and the Corporation`s website at www.oryxpetroleum.com. Further, statements including forward-looking information in this news release are made as at the date they are given and, except as required by applicable law, Oryx Petroleum does not intend, and does not assume any obligation, to update any forward-looking information, whether as a result of new information, future events or otherwise.  If the Corporation does update one or more statements containing forward-looking information, it is not obligated to, and no inference should be drawn that it will make additional updates with respect thereto or with respect to other forward-looking information.  The forward-looking information contained in this news release is expressly qualified by this cautionary statement.

SOURCE: Oryx Petroleum Corporation Limited

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