Our new subsidiaries, formerly the Tiway Companies, own interests in three producing areas, two of which have significant potential:
- South Akcakoca Sub-Basin: offshore gas play (36.75% WI); substantial untapped contingent and discovered resources
- Cendere: onshore oil play (19.6% WI); long life – estimated 10+ years remaining
- Bakuk: onshore gas play (50% WI); operated by one of our new subsidiaries
Current production from the three areas has averaged 434 BOE per day for the first six months of 2016.
South Akcakoca Sub-Basin (“SASB”) gas field
We now own a 36.75% non-operated working interest in SASB, a gas producing field located in the southern Black Sea with 4 platforms and an onshore gas processing plant. To date, the field has produced gross 37 Bcf (~1 Bcm). Based on original reserve projections, we estimate there 47 Bcf (1.3 BCM) reserves still to be produced from initial producing areas.
The field was first discovered in 2004 with a total of 22 wells drilled in the field. There are presently 10 wells connected to the existing infrastructure. In excess of US$450 million (100%) invested in infrastructure and drilling to date. However, there has very little redevelopment work at the field since the original wells were drilled.
Current gas price is greater than US$7.00 per Mcf. The net back at SASB after operating costs and royalty is US$4.00 per Mcf.
FUTURE PLANS IN TURKEY
The Company plans to drill new step out production wells from the existing SASB platforms in 2018. Each of the four platforms can accommodate between 1 and 3 new wells. The platforms connect through a network of pipelines to an onshore gas plant with the capacity to handle 75 MMcfd of gas. Drilling these new production wells should markedly increase production and significantly extend the productive life of the SASB field. In the longer term, there are 5 more wells that were drilled and tested substantial gas flow rates in the SASB field but are not connected to the current infrastructure.
SASB UNDEVELOPED DISCOVERIES AND PROSPECTS
Five wells were drilled, tested and then temporarily abandoned.Each of these wells tested significant daily quantities of gas. We believe these 5 wells have up to 60 Bcf in contingent resources. We will look for ways to connect and produce these resources:
- South Akcakoca
- West Eskikale
Based on the same technology that discovered the existing wells, we have identified an additional 8 undrilled prospects defined on 3D seismic data.
Cendere Oil Field
Cendere is an oil field discovered in the 1990s which is a long lived oil field. There are currently 16 producing wells yielding gross 600 barrels per day (net to us 110 bbl/d). The operating costs are high because of disposal of water since the field has a 95-98% water cut. However, it is anticipated the field can continue to produce for another 10 years.
We now own a 19.6% working interest (except 3 wells in which the equity is 9.8%). The field has produced greater than 19 million barrels to date from an estimated 45 million original oil in place.
The field holds potential for some production increases through low cost perforations in upper pay zones, additional infill well opportunities, the possible lateral extension of the existing field and the possibility for tertiary development.
Bakuk Gas Field
The Bakuk gas field contains one producing well and is located near the Syrian border. The well has averaged about 48 Mcf/D through the first half of 2016. One of our subsidiaries operates the field and has a 50% working interest. The field has limited opportunities for further development.
Derecik Exploration Licences – Zagros Basin
Park Place through the acquisition of the Tiway companies has 42,833 hectares (105,797 acres) of contiguous exploration blocks (Derecik Exploration Licences) covering the northern extension of the prolific Iraq/Kurdistan Zagros Basin, but are located within Turkey where the fiscal terms consist of a 12.5% royalty on gross production. The reservoirs and source rocks within the Derecik Licences are analogous to the Kurdistan’s Shaikan Oil Field (639 MM bbls of 2P oil) which is 90 kms southwest of the Derecik Licences. Surface mapping and seismic surveys conducted by Tiway have identified 7 prospective anticlinal trends with 2 of those prospects illustrating 4-way closure and are drill ready. Oil seeps occur on the Derecik Licences and display similar chemistry to the nearby Kurdistan oil fields with some of the oil seeps being up structure from a Derecik License drill ready prospect. The Derecik 2 drill ready prospects have potential stack prospective reservoirs and an in house Monte Carlo evaluation gives a P50 of 312 MM bbls oil, unrisked.
Turkey Country Facts
- Democratic government operating under a parliamentary system.
- Capital is Ankara.
- Population is 79+ million people.
- Dominant religion is Islam
Turkey has highly favorable license and fiscal terms. For both oil and gas, royalty is a flat 12.5%
There is a corporate income tax at 20%. Currently, our new subsidiaries have loss carry forwards available to offset future profits
When profits are distributed through dividends, there is a dividend tax of 10%. However, capital that is invested in Turkey as foreign investment is registered. The return of the registered capital is not subject to the dividend tax. Our new subsidiaries already have a substantial registered capital account.