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Tethys Steps It Up In Kazakhstan

Jul. 29, 2013 12:56 PM ET
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Tethys Petroleum (LON:TPL, TSE:TPL) is to use the funds it received from last month's farm-out agreement on its Bokhtar venture in Tajikistan to accelerate its Kazakhstan drilling programme.

Dr David Robson, executive chairman and president of Tethys said: "Our world-class farm-out agreement in Tajikistan has enabled the company to use these funds to accelerate our drilling programme in Kazakhstan demonstrating the real synergies in our portfolio. The programme is comprised of two oil exploration wells, including a deeper Triassic target, which are designed to unlock high potential prospects but represent limited risk due to their proximity to the already producing Doris field."

The AKD08 (Doto) and AKD09 (Dexa) wells will be drilled simultaneously.

Doto is located to the south-west of the producing Doris field and north of the Dione oil discovery. The Doto prospect has had 22 million barrels gross mean unrisked recoverable prospective oil resources in the Cretaceous and Upper Jurassic sequences attributed to it by independent consultants.

Drilling on Doto should start in early September and is expected to take around 70 days.

The Dexa well is located to the north-west of the Doris field and has 14 million barrels gross mean unrisked recoverable prospective oil resources attributed to it.

Drilling on this exploration/appraisal well is due to start towards the end of September and should take 45 to 50 days to reach its target depth. It will be drilled using Tethys's own ZJ30 Tykhe rig, which is on its way from Tajikistan.

Both prospects offer relatively low risk exploration/appraisal opportunities and are the two closest currently identified exploration/appraisal targets to the Doris oil field itself, Tethys said.

The group is to follow up its successful drilling programme on the Akkulka block, where 11 of the 13 wells came up trumps with commercial levels of gas, by drilling a further five shallow gas wells, starting in late September or early October.

Tethys has re-focused some of its investment into accelerating gas development and exploration after the significant increase in the realised gas price in January of this year.

The new Kazakhstan-China gas trunk line under construction, which is planned to pass through Tethys's contract areas, will provide an additional commercialisation route and offers potential further price upside, the company believes.

Overall infrastructure in the field area is also improving and a new railway is now under construction with a new rail station planned to be built only some 70 kilometres from the Doris oilfield and 23 kilometres from the nearest Akkulka gas well. This could provide more cost effective transportation options for oil plus a nearby market for some gas, Tethys added.

Shares in Tethys were up 1.3% at 44.7p in early deals.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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