KUALA LUMPUR (Dec 3): Reach Energy Bhd announced today that initial testing of the exploration well at North Kariman-3 (NK-3) in its Emir Oil concession block onshore Kazakhstan has yielded positive results.

"The NK-3 well has been safely and successfully executed as budgeted," it said, noting that the well penetrated the target Mid-Triassic carbonate reservoirs, reaching a total depth of 4140.66m.

"This will contribute significantly to Reach Energy’s reserves. In addition, reservoir pressure from the NK-3 well was determined to be relatively high compared with surrounding wells, and this suggests that it would be a highly productive well once it is put on production," it added in a filing with Bursa Malaysia today.

Reach Energy said Emir Oil is now proceeding to apply for a test production licence to further ascertain the commercial viability of this well.

"There are two shallower intervals that will be perforated in the future once the test production of the aforementioned interval is completed. If they prove to flow oil, this would further enhance the value of this well in terms of commerciality and contribution to overall reserves and production," it said.

The NK-3 well was spudded on Feb 10 and is the first of six wells committed under the current exploration contract with the Ministry of Energy, Kazakhstan.

Reach Energy chief executive officer Shahul Hamid Mohd Ismail said the NK-3 well's relative close proximity to the Kariman field would allow for a seamless integration into commercial production once it obtains the production licence for the North Kariman field.

"This process is ongoing and proceeding as planned, as we expect to obtain the North Kariman production licence in 2019,” he added.

Shares of Reach Energy closed unchanged at 32.5 sen today, with 11.05 million shares done, bringing a market capitalisation of RM415.29 million.