Oryx Petroleum Corporation Limited Announces Operations Update for Kurdistan Region of Iraq

Advancing exploration activities and continued progress towards first production

CALGARY, Sept. 9, 2013 /CNW/ - Oryx Petroleum Corporation Limited ("Oryx Petroleum" or the "Corporation") today announced an update on its activities in the Kurdistan Region of Iraq.

CEO`s Comment

Commenting today, Oryx Petroleum`s Chief Executive Officer, Michael Ebsary, stated:

"We continue to make great progress on all fronts in our Hawler license area.  Progress continues towards first production from the Demir Dagh discovery with an early production facility now contracted and we are advancing the balance of our exploration program. Testing of our second exploration well at Zey Gawra will begin in the next few weeks,   preliminary indications from the third exploration well at Ain Al Safra are encouraging and we will spud our fourth and possibly most significant exploration well at Banan in the next two weeks.  The coming months in Kurdistan should be exciting as we continue to unlock the potential we see in the Hawler license area."

Hawler License Area

• Demir Dagh Discovery: Contract Signed for Early Production Facility
  
  Oryx Petroleum recently agreed to lease an Early Production Facility (EPF)  from Expro, an international oilfield services company specializing in well flow management (www.exprogroup.com). The facility will have multiple trains with the ability to process light, heavy, sweet or sour crudes types. The lease period is expected to be two years with options to purchase at any point during the lease. The EPF will have an initial capacity of 25,000 bbl/d and will be re-engineered to a capacity of 40,000 bbl/d. The facility is expected to be in place in Q1 2014 with first production planned for Q2 2014. The EPF may also be utilized for the appraisal of the other outlying prospective fields Banan and Zey Gawra.
  
  Site preparation has commenced for the EPF which will be located 150 metres from the DD-2 well site and 500 metres from the Khurmala to Faysh Khabur pipeline that is expected to be completed by the end of 2013. A truck tanker loading station with initial capacity of 10,000 bbl/d will also be constructed 9.5 kilometres from the EPF near the main highway to facilitate domestic sales.

• Banan Prospect:  Spudding of BAN-1 Exploration well and Additional Seismic Acquisition
  
  Oryx Petroleum expects to spud the BAN-1 well, its fourth exploration well in the Hawler license area, targeting the Banan prospect in the next two weeks. The KS Discover-1 rig has completed its move off the ZEG-1 well site to the BAN-1 site and is preparing to spud. The BAN-1 well is targeting oil potential in the Cretaceous, Jurassic and Triassic and is expected to reach total depth of 4,153 metres in Q1 2014.
  
  Netherland, Sewell & Associates, Inc. ("NSAI"), an independent oil and gas consulting firm, estimates as of March 31, 2013 that the Banan prospect contains 196 MMbbl of unrisked gross (100%) prospective resources (risked: 102 MMbbl). NSAI`s estimate excludes a significant portion of the Banan prospect that was outside the Hawler license area boundaries prior to the December 2012 boundary extension.  Mobilisation is underway for a seismic campaign to acquire approximately 210 kilometres of 2D seismic covering the extended portion of the license area that will enable the Corporation to better understand and map the Banan structure.
  
  The BAN-1 well will be drilled approximately eight kilometres from the DD-2 well site. The Corporation is seeking to establish the presence of hydrocarbons in the Banan structure and the distribution of hydrocarbons across the shared spillpoint between the Demir Dagh and Banan anticlines.  The results of the BAN-1 well could significantly impact development plans for the Demir Dagh field.

• Zey Gawra Prospect: Commencement of Testing of Zey Gawra Exploration Well (ZEG-1)
  
  As previously reported, the ZEG-1 well reached a total depth of 4,398 metres in early August. Oryx Petroleum has recently brought in a third rig, the Romfor 22 rig, to the Hawler license area, and has moved it on to ZEG-1 to commence the testing program. Based on logging of hydrocarbon bearing zones the Corporation intends to test four zones with one additional test contingent on results of the fourth test.  Depending on how many tests are conducted, the Corporation expects the testing program to be completed in  Q4.
  
  The ZEG-1 well is targeting oil potential in the Cretaceous, Jurassic and Triassic. NSAI estimates as of March 31, 2013 that the Zey Gawra prospect contains 23 MMbbl of unrisked gross (100%) prospective resources (risked: 9 MMbbl).

• Ain Al Safra Prospect: Progress of Ain Al Safra Exploration Well (AAS-1)
  
  As previously reported, the Sakson Hilong 10 rig spudded an exploration well targeting the Ain Al Safra prospect in the Hawler license area in early June. The AAS-1 well is targeting oil potential in the Cretaceous, Jurassic and Triassic. NSAI estimates as of March 31, 2013 that the Ain Al Safra prospect contains 225 MMbbl of unrisked gross (100%) prospective resources (risked: 44 MMbbl).
  
  The AAS-1 well has reached depth of approximately 3,000 metres in the lowermost Jurassic. The AAS-1 was originally scheduled to drill to a total depth of 3,700 metres in Q4 2013. Based on logging information and observations during drilling the Cretaceous reservoir has been deemed wet. However, in the lower Jurassic reservoirs, free oil on the shakers and sizable losses of drilling fluids have been observed with significant quantities of oil flowing to surface while drilling. Based on these observations during drilling and logging information, testing of at least three zones in the lower Jurassic is planned.
  
  Very heavy losses of drilling fluids were experienced at current total depth, which is symptomatic of a significant permeable fracture system. The losses and related absence of drilling fluids caused the bottom hole assembly (BHA) to become stuck. Attempts to free the BHA to date have been unsuccessful. The Corporation now plans to secure the well and test the lower Jurassic reservoirs. Further drilling into the Triassic will be dependent on the testing of the lower Jurassic reservoirs. The lower Jurassic testing is expected to commence in the next two weeks and conclude in early Q4.

Sindi Amedi License Area

• Conclusion of Seismic Acquisition and Analysis and Relinquishment of License
  
  A campaign targeting acquisition of approximately 145 kilometres of 2D seismic was completed in mid-August.  The seismic covered the Gara East and Tawke East prospects. Based on analysis of the recently collected seismic data and prior data, Oryx Petroleum and its partner in the license area concluded that none of the identified prospects meet acceptable risk-reward parameters and that the license area should be relinquished. The partners have fulfilled all work commitments under the Production Sharing Contract as amended earlier in 2013. Capital earmarked for Sindi Amedi will be re-deployed elsewhere in the Corporation's portfolio.

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 prospective for oil and 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).

Reader Advisory Regarding Forward-Looking Information

Certain statements in this news release constitute "forward-looking information", including statements related to the nature, timing and effect of the Corporation's future capital, business and acquisition strategy and goals, opportunities, reserves and resources estimates and potential, drilling plans, development plans and schedules and chance of success, future seismic activity, 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", "would", "could", "should", "anticipate", "believe", "intend", "expect", "plan", "estimate", "budget", "outlook", "propose", "potentially", "project", "forecast" 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.

In addition, information and statements in this news release relating to reserves and resources are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. See "Reserves and Resources Advisory" below.

Although Oryx Petroleum believes these statements to be reasonable, the assumptions upon which they are based may prove to be incorrect. In making certain statements in this news release, Oryx Petroleum has made assumptions with respect to the following: the general continuance of the current or, where applicable, assumed industry conditions, forecasts of capital expenditures and the sources of financing thereof, timing and results of exploration activities, access to local and international markets for future crude oil production, if any and future crude oil prices, the Corporation's ability to obtain and retain qualified staff, contractors and personnel and equipment in a timely and cost-efficient manner, the political situation and stability in jurisdictions in which Oryx Petroleum has licenses, the ability to renew its licenses on attractive terms, the Corporation's future production levels, the applicability of technologies for the recovery and production of the Corporation's oil reserves and resources, the amount, nature, timing and effects of capital expenditures, geological and engineering estimates in respect of the Corporation's reserves and resources, the geography of the areas in which the Corporation is conducting exploration and development activities, operating and other costs, the extent of the Corporation's liabilities, and business strategies and plans of management.

Forward-looking information is subject to known and unknown risks and uncertainties which may cause actual results or events to differ materially from those anticipated in the forward-looking information and statements if the assumptions underlying them prove incorrect, or if one or more of the uncertainties or risks described below materializes.  The risks and uncertainties affecting the Corporation include, but are not limited to, imprecision of reserves and resources estimates; ultimate recovery of reserves, ability to commercially develop its oil reserves and/or its prospective and contingent oil resources; commodity prices; general economic, market and business conditions; industry capacity; competitive action by other companies; refining and market margins; the ability to produce and transport crude oil and natural gas to markets; weather and climate conditions; results of exploration and development drilling and other related activities; fluctuation in interest rates and foreign currency exchange rates; ability of suppliers to meet commitments; actions by governmental authorities, including increases in taxes; decisions or approvals of administrative tribunals, renewal or granting of licenses; changes in environmental and other regulations; international political events; renegotiations of contracts; reliance on key managers and personnel; dry wells may lead to a downgrading of the Corporation's licenses or contracts or require further funds to continue exploration work; future foreign currency exchange rates; risks related to the actions and financial circumstances of our agents and contractors, counterparties and joint venture partners; political uncertainty, including actions by terrorists, insurgent or other groups, or other armed conflict, including conflict between states; and expected rates of return.  More specifically, future production may be affected by exploration success, start-up timing and success, facility reliability, reservoir performance and natural decline rates, water handling and drilling progress, restrictions on ability to access necessary infrastructure, equipment and services, including but not limited to, those sourced from third party providers.  Capital expenditures may be affected by cost pressures associated with new capital projects, including labour and material supply, project management, drilling rig rates and availability and seismic costs. Risk factors are discussed in greater detail in filings made by the Corporation with Canadian securities commissions.

Readers are strongly cautioned that the above list of factors affecting forward-looking information is not exhaustive.  Although the Corporation believes that the expectations conveyed by the forward-looking information are reasonable based on information available to it on the date such forward-looking information was made, no assurances can be given as to future results, levels of activity and achievements. Readers should not place undue importance or reliance on the forward-looking information and should not rely on the forward-looking information as of any date other than the date hereof.  Further, statements including forward-looking information 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 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.

Reserves and Resource Advisory 

Oryx Petroleum's reserves and resource estimates have been prepared and audited in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and the Canadian Oil and Gas Evaluation Handbook.

Prospective oil resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective oil resources have both a chance of discovery and a chance of development. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources.

 

SOURCE: Oryx Petroleum Corporation Limited

Craig Kelly
Chief Financial Officer
Tel.: [phone]
[email protected]
 
Scott Lewis
Head of Corporate Finance
Tel.: [phone]
[email protected]