KUALA LUMPUR (Oct 24): Reach Energy Bhd said it has yielded “positive results” from the Yessen-3 (Y-3) exploration well in its Emir Oil Concession Block onshore Kazakhstan, which is expected to contribute to the company's reserves due for update early next year.

The group said in an exchange filing today the Y-3 well has now been safely and successfully completed as budgeted, and will now enter the next stages.

“The well penetrated the Mid-Triassic carbonate reservoirs, with a total depth (True Vertical Depth Subsea, TVDSS) of 3,615.6 metres. The Y-3 well has been safely and successfully completed as budgeted.

“Preliminary log evaluation indicated up to 34 meters of oil-bearing reservoir. Two out of three intervals have been perforated and tested, flowing oil and gas. Future work in the near term includes perforating the remaining untested interval to confirm positive log evaluation,” it said in the filing.

Reach Energy said additional work is currently being undertaken to establish the full potential of this discovery, and integrate the newly obtained geological data and understanding with the Block-wide data gathered to date.

In addition to the previous exploration wells in the vicinity (Yessen-1 and Yessen-2), the group said it has confidence in obtaining a production licence for the Yessen field next year.

“The results of this well indicate a larger hydrocarbon accumulation on the Yessen structure. The success of Y-3 well represents a continuation of 100% success rate in oil discoveries in the Yessen Field, as previous exploration wells in the vicinity (i.e. Yessen-1 and Yessen-2) have also discovered oil.

“The positive results of the aforementioned wells underline the company’s confidence in obtaining a Commercial Production License for the Yessen Field as early as 2019,” it said.

Reach Energy chief executive officer Shahul Hamid Mohd Ismail said the results of the Y-3 test production has been encouraging, in terms of the full block potential of Emir Oil.

“This discovery highlights the vast exploration upsides that the Emir-Oil Concession Block has, and we look forward to further exploration successes such as this with our upcoming exploration wells in the near term.

"We expect this development to have a positive impact to our reserves, which is due to be updated early next year by our reserves auditor, Gaffney, Cline and Associates,” he added.

Currently, Emir-Oil’s 2P reserves stands at 81 million barrels of oil equivalent (mmboe).

Shares in Reach Energy fell 3.5 sen or 8.33% to close at 38.5 sen today, bringing it a market capitalisation of RM491.96 million.