Gross 2P reserves
bopd gross production in 2016
The Taq Taq licence area is located 60 km northeast of the Kirkuk oil field and the adjacent city of Kirkuk, 85 km southeast of the city of Erbil and 120 km northwest of the city of Sulaimaniah. The gross area of the Taq Taq licence area is approximately 951 square km.
The Taq Taq field has been producing since 2006. As of 30 June 2017 the field had produced over 210 mmbbls, generating over $12 billion in sales.
On 29 February 2016, the Company announced that the 2P initial gross recoverable reserves (referred to in the industry as Estimated Ultimate Recovery, or EUR) for the Taq Taq field had been downgraded from 683 MMbbls to 356 MMbbls. On 28 March 2017 the Company announced a further downward revision of Taq Taq 2P EUR to 267 MMbbls, implying gross 2P reserves of 61 MMbbls at year-end 2016 (from 172 MMbbls at year-end 2015). Genel’s net share of Taq Taq 2P reserves at year-end 2016 is 27 MMbbls. The further reduction of 2P EUR for Taq Taq is a consequence of a reassessment of the gross rock volume above the oil water contact and fracture porosity in the undrained Cretaceous Shiranish reservoir, following an analysis of reservoir surveillance data and well performance from 2016.
The overriding strategy for the Taq Taq field is to generate free cash flow flow – and $32 million in free cash flow was generated in the first half of 2017 – and maximise gross ultimate recovery.
The TT-29w well, reached target depth of 3,100 metres in early September 2017, and encountered good quality oil bearing Cretaceous Shiranish and Kometan reservoirs. Six zones were subsequently tested over a 20 day period, with test rates of up to 6,400 bpd (40/64 inch choke) of 48° API oil delivered from individual zones. Four of the five tests in the Shiranish produced dry oil, with one test tight. The Kometan reservoir test produced oil with a 40-50% water cut, confirming the oil water contact within the Kometan reservoir at this location in the field.
TT-29w production has commenced from the Lower Shiranish reservoir at a rate of 3,200 bpd of dry oil on a restricted 24/64 inch choke, with the expectation that this rate will increase following an initial observation period.
The TT-29w well has proved a current oil water contact at this location on the northern flank of the field at a level at least 145 metres deeper than pre-drill estimates. Combined with the testing results, management is optimistic for the potential of the northern flank of the Taq Taq field. However, it is too early to estimate what impact the well result will have on reserves, long-term production rates or future investment activity in the northern flank and the field as a whole.
In addition to the positive result from TT-29w, the TT-30 Pilaspi well was also successfully drilled as a producer in November and is currently producing around c.650 bopd. A further Pilaspi development well (TT-31) is planned before the end of 2017.
As stated in the full year 2016 results, Genel intends to announce Taq Taq field gross production on a monthly basis going forward:
- December 2017 - 15,068 bopd
- November 2017 - 13,680 bopd
- October 2017 - 13,351 bopd
- September 2017 - 13,475 bopd
- August 2017 - 14,043 bopd
- July 2017 - 14,705 bopd
- June 2017 - 15,939 bopd
- May 2017 - 16,917 bopd
- April 2017 - 18,011 bopd