This article first appeared in The Edge Financial Daily on November 19, 2019

KUALA LUMPUR: Reach Energy Bhd has obtained “positive results” from testing the exploration well K-16 in its Emir Oil Concession Block onshore Kazakhstan.

Reach Energy told Bursa Malaysia that K-16 is currently in extended well testing to further ascertain its commercial viability.

“As part of Emir-Oil exploration commitment, the K-16 vertical exploration well spudded on Oct 9, 2018 and reached target depth at 3,983m on Feb 6, 2019. The well penetrated the target Mid-Triassic carbonate reservoirs, reaching a total depth of 3,957m.

“The well was perforated in November 2019 after extensive study of the well data and obtaining necessary approvals for perforation of the well. This well identified highly graded hydrocarbon trap near the west flank of Kariman field and allowed to understand the geological structure in whole,” it said.

Reach Energy also said the K-16 well confirms larger extent of the hydrocarbon resource exploited in the Kariman geological structure.

“It has been safely and successfully executed as budgeted. The K-16 well encountered oil intervals in the Mid-Triassic (T2B) based on the open-hole log interpretation,” it explained.

The group also said this discovery will contribute significantly to its reserves.

“There are two intervals that will be perforated in the future once the extended well test of mentioned interval is finished. 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, respectively, production,” it said.

Reach Energy CEO Ir Shahul Hamid Mohd Ismail said this is the benefit of strategic planning of exploration wells, as the group has prioritised high “chance of success” wells that can be swiftly linked into its existing production network and contribute to revenue stream in the near term.

“The K-16 well certainly satisfies the set criteria, as its relative close proximity to the Kariman field would allow for a seamless integration into commercial production once we obtain Kariman Mining Allotment extension,” he said.

Reach Energy’s share price gained 0.5 sen or 2.63% to 19.5 sen yesterday, giving it a market capitalisation of RM249 million.