Shares of WesternZagros Resources (CVE:WZR) have been flying higher of late, up more than 22% in past two trading sessions, as investors are eager for updated resource numbers from the company's Oligocene reservoir of its Kurdamir structure in Iraq, after successful well tests late last year.
Its stock is up almost 7% this afternoon, to $1.15, closing on Monday at 94 cents. In the last year, its shares have soared more than 71%.
In an investor webcast in mid-December, CEO Simon Hatfield said he expects that the latest Kurdamir-2 test and wireline log data will "substantially increase" contingent and prospective resource estimates for the Oligocene reservoir, adding that the updated numbers should be available before the beginning of February.
Recent test results from the Kurdamir-2 well at the Oligocene reservoir were released earlier that month. The second cased-hole test, which was conducted over a 24-metre thick interval between depths of 2,528 and 2,552 metres, achieved a stabilized flow rate of 2,184 barrels per day of light, 42 degree API oil and 10.4 million cubic feet per day of natural gas.
The initial open-hole test conducted earlier this year in March resulted in a major oil discovery in the Oligocene interval, and in late November, the company said the first cased hole test in the Oligocene formation of the Kurdamir-2 well far exceeded expectations.
"The results continue to support our belief that the Oligocene has the potential to hold over a billion barrels of recoverable oil. We are excited about our next appraisal well in the Kurdamir structure at Kurdamir-3. Kurdamir-3 will spud as soon as possible in the new year," Hatfield said in November.
The flow rates in the most recent cased hole test in Kurdamir-2 were recorded after flowing and stabilizing the well for three days at progressively larger choke sizes.
The current independently audited unrisked mean estimates for the contingent resources in the Oligocene reservoir of the Kurdamir structure are 990 billion cubic feet of gas, 39 million barrels (MMbbl) of condensate and 147 MMbbl oil as of April 20. As of May 31, the unrisked mean estimate for the prospective resources in the Oligocene reservoir is 1,150 MMbbl.
The junior oil and gas explorer has a 40 per cent working interest in the Kurdamir block, while Talisman Energy (TSE:TLM), the operator of the well, also holds a 40 per cent working interest, with the Kurdistan regional government holding the remainder.
Also in the December update to shareholders, WesternZagros said that while it is focusing on its Kurdamir wells in the Oligocene and Eocene reservoirs, it also has its sights on the Baram prospect as it heads into 2013.
The Baram prospect was previously viewed as separate, but WesternZagros said it now knows that oil leg extends well beyond the limits of the four way closure on Kurdamir.
Earlier this month, the junior oil and gas company said it awarded a contract for two rigs to a North American company, to drill on its Garmian Block in the Kurdistan Region of Iraq.
Late last month, the company also appointed William Jack to the position of general manager in Kurdistan, effective February 1. Jack has 30 years of "progressive leadership" in international oil and gas roles, the company noted, having spent the majority of his career with BP (NYSE:BP) (LON:BP) on projects in the United Kingdom, Middle East, Russia, Australia and North America.
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