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  • Citation Resources Intersects Visible Oil Shows At Atzam-5 0 comments
    Apr 6, 2014 8:49 PM

    Citation Resources (ASX: CTR) has intersected significant visible oil shows through the shallower C13 and C14 carbonate sections at its Atzam-5 appraisal well in Guatemala.

    Adding to that, background gas increased to 80% in drilling through the C14 carbonate section, indicating hydrocarbon charged carbonate systems are being intersected on structure.

    While drilling has yet to intersect the primary target C18 and C19 reservoirs, the oil shows in the shallow carbonates result is promising.

    Atzam-5 has intersected the top of the C15 carbonates at a depth of 2,230 feet, approximately 28 feet low to Atzam-4 and 336 feet high to Atzam-2.

    This has established the Atzam-5 well, located over 1 kilometres to the south of the Atzam-4 well, to be structurally high to the Atzam-2 well that flowed at over 1,000 barrels per day of oil from the C18 and C19 carbonate sections.

    Citation expects to reach the top of the C18 carbonate section in 7-10 days.

    Range Resources (ASX: RRS) has a 19.9% stake in Citation.

    Atzam-5

    Operator Latin American Resources had recently successfully set and cemented the first intermediate 13 3/8 inch casing string in the well.

    This was a critical operational phase due to the complex limestone geology present down to the top of the carbonate units.

    It had also installed flow testing tanks and a separator unit at the well head at Atzam-5 that allows for the immediate testing of any potentially commercial carbonate zones as the well drills through the target carbonate sections.

    This enables the operator to immediately commence a commercial production testing program if a carbonate zone produces material flows to surface from drilling without waiting for the well to reach its planned depth of 4,100 feet.

    Atzam-5, located about 1 kilometre southeast of Atzam-4, targets the C18 and C19 carbonate reservoirs that produced strong oil shows in the producing Atzam-4 but were unable to be flow tested. It will also intersect the current producing C17 carbonate reservoir.

    Analysis

    To recap, Atzam-5 is an exciting well for Citation given that it targets two carbonate sections that had strong oil shows, but were not tested in Atzam-4.

    Intersecting oil shows at the shallower C13 and C14 carbonates is encouraging when taken together with the increasing background gas levels, which indicate that hydrocarbon charged carbonate systems are being intersected.

    Success would add another producing well to the company's portfolio, which includes the Atzam-4 well that continues to flow at 170 barrels of oil per day, allowing it to meet its targeted production rate of more than 600bpd.

    There is further upside to the Atzam oil field with Citation continuing to advance plans to commence the two initial well re-entries on the Tortugas Salt Dome structure in the first half of 2014 following the drilling and production testing of Atzam-5.

    Successful well re-entries on these first two planned Tortugas wells, 63-4 and 63-5, are expected to produce between 200-300bopd each of high quality 34 degrees API oil based on historical flow rates and production profiles.

    These along with Atzam-5 are catalysts for share price growth from the current $0.016 as the company builds its oil production profile. We can see further upside in the Citation Resources share price.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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