SAINT HELIER, Jersey, May
15, 2014 /PRNewswire/ - LONGREACH OIL AND GAS LIMITED
(TSXV: LOI) (the "Company" or "Longreach") has
encountered two prospective natural gas zones with its Kamar-1 well
on the Kechoula structure, located in the Sidi Moktar licence in
the Essaouira Basin of Morocco. One zone was in the targeted
Lower Liassic formation and the other in the Lower Dogger/Upper
Liassic formations.
"These are very promising exploration results
from our second Moroccan well, which adds vital, new technical
evidence to our growing understanding of the large resource
potential in the Kechoula structure. Most importantly, our Kamar-1
well did not encounter any bottom water, which is excellent news
for Longreach shareholders and our Moroccan partners," said
Dennis Sharp, Longreach's Executive
Chairman.
The Kamar-1 well was drilled to a final total
depth of 2,790 metres and intersected two distinct gas-bearing
intervals. One is in the targeted Lower Liassic natural gas zone
and has a gross interval of 110 metres as defined by
petrophysical, wireline logs. The other is defined by the presence
of significant natural gas volumes in the drilling mud within the
Lower Dogger/Upper Liassic zone, which occurs over a gross interval
of approximately 100 metres.
"The absence of water in the Lower Liassic
formation at the Kamar-1 location adds credence to our previous
hypothesis that the incursion of abnormally high-pressured salt
water in the Koba-1 well is localized and not an indication of
water present in the bottom of the Lower Liassic formation
throughout the Kechoula structure," Sharp said.
Kamar-1 was drilled following a disciplined path
that capitalized on the lessons learned in Koba-1, which was
drilled in late 2013 at a location four kilometres to the
northwest. Kamar-1 intersected the Lower Liassic at a depth of
2,132 metres, where, after penetrating some 30 metres, drilling was
halted in order to obtain intermediate logs. These logs were
interpreted and a number of gas-bearing intervals were selected to
test for flow rates, pressures and composition. However, the
wireline-conveyed testing equipment was unable to obtain conclusive
data about potential flow rates. Once completed, drilling resumed
until the total depth of 2,790 metres was achieved and then a final
suite of petrophysical logs, acoustic check-shot data and selected
side wall cores were obtained.
These data are currently being processed,
reviewed, analysed and integrated with the Koba-1 results for the
purpose of designing an extensive formation testing program over
the gas-bearing intervals encountered at both the Koba and Kamar
wells. Contingent on the results of this testing program, a
follow-up 3-D seismic program aimed at better identifying potential
appraisal drilling locations is planned.
Delineating and defining a hybrid natural gas
reservoir
Longreach's exploration mapping, drilling, logging and core samples
data are continuing to define the Kechoula gas-charged structure as
geologically complex. Rock sample analyses to date show an internal
geological character containing sedimentary beds that are porous
and permeable, representing traditional conventional reservoirs,
interbedded with tighter sandstones, or unconventional reservoirs
that typically span extensive areas and have the potential to yield
long productive lives.
Longreach believes it has encountered a hybrid
reservoir that holds substantial resource potential. Unlocking this
potential requires a comprehensive technical approach, employing
both conventional and unconventional reservoir completion
techniques of the type that have underpinned North America's recent oil and gas production
revolution.
Reservoir evaluation continues alongside
plans to secure financing for future operations
Evaluating Longreach's first two exploration wells and the Kechoula
structure represents the initial work in the Company's four-step
process to creating sustainable, economic value from prospective
reservoirs. The Longreach approach to value creation is founded in:
1) understanding the reservoir; 2) designing a recovery method that
maximizes value; 3) implementing cost-effective development; and 4)
generating sustainable netbacks using sustainable practices. The
Company's Moroccan value creation work is at the early stages of
this well-established and well-recognised methodology - a
disciplined process that has seen the Company's Canadian technical
team generate repeated economic success in a series of companies
across the Western Canada Sedimentary Basin over the past 30 years.
The Company's next steps in Morocco are expected to include continued
evaluation of exploration results to date, which will help define
future field work and program plans. Longreach is also planning to
conduct financial planning to source the capital required to fund
continued work to fully understand the Kechoula structure -
essential work that will help set the foundation for potential
natural gas production for Longreach and its Moroccan partners at
Kechoula and other prospects within the Sidi Moktar acreage.
About Longreach
Longreach is an independent Canadian oil and gas company focused on
its significant land position in Morocco. The Company has a 50 percent operated
interest in the Sidi Moktar licence area covering 2,683 square
kilometres and is working closely with ONHYM as a committed
long-term partner to unlock the hydrocarbon potential of the
region. Morocco offers a
politically stable environment to work within and has favourable
fiscal terms to energy producers. Longreach is a public company
listed on the TSX Venture Exchange under the symbol "LOI".
Additional information about the Company can be
found at www.longreachoilandgas.com and under the Company's SEDAR
profile at www.sedar.com.
Special Note Regarding Forward Looking
Statements
This press release contains forward-looking statements. Such
forward-looking statements relate to future events or the Company's
future performance. All statements other than statements of
historical fact are forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of
words such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "project",
"potential", "targeting", "intend", "could", "might", "continue" or
the negative of these terms or other similar terms. Forward-looking
statements in this press release include, but are not limited to,
statements regarding the drilling of the Karmar-1 well at the
Company's operated Sidi Moktar onshore license area in Morocco; the continued absence of water at the
bottom of the Lower Liassic formation throughout the Kechoula
structure; the ability of the Company to conduct a follow-up 3-D
seismic program; the ability of the Company to successfully verify
the potential of the Kechoula structure; the ability of Longreach
to successfully employ the four-step process of exploration
methodology at its exploration wells and the Kechoula structure to
allow management to repeat the success enjoyed in the Western
Canada Sedimentary Basin; and the ability of the Company to source
the capital required to fund continued work to fully understand the
Kechoula structure. Forward-looking statements are only
predictions. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements. Some of the risks and other
factors which could cause results to differ materially from those
expressed in the forward-looking statements contained in this press
release include, but are not limited to: general economic
conditions in Canada, the Kingdom
of Morocco and globally; industry
conditions, including fluctuations in the price of oil and gas,
governmental regulation of the oil and gas industry, including
environmental regulation; fluctuation in foreign exchange or
interest rates; risks inherent in oil and gas operations; political
risk, including geological, technical, drilling and processing
problems; unanticipated operating events which could cause
commencement of drilling and production to be delayed; the need to
obtain consents and approvals from industry partners, regulatory
authorities and other third-parties; stock market volatility and
market valuations; competition for, among other things, capital,
acquisitions of reserves, undeveloped land and skilled personnel;
incorrect assessments of the value of acquisitions or resource
estimates; any future inability to obtain additional funding, when
required, on acceptable terms or at all; credit risk; changes in
legislation; any unanticipated disputes or deficiencies related to
title matters; dependence on management and key personnel; and
risks associated with operating in and being part of a joint
venture. Although the forward-looking statements contained in this
press release are based upon factors and assumptions, which
management of the Company believes to be reasonable, the Company
cannot assure that actual results will be consistent with its
expectations and assumptions. Material factors and assumptions,
which management of the Company has considered in connection with
making the forward-looking statements in this press release,
include that the Company will be able to successfully employ its
process of exploration methodology at its exploration wells and the
Kechoula structure. Undue reliance should not be placed on the
forward-looking statements contained in this news release as there
can be no assurance that the plans, intentions or expectations upon
which they are based will occur. These statements speak only as of
the date of this press release, and the Company does not undertake
any obligation to publicly update or revise any forward-looking
statements except as expressly required by applicable securities
laws.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
This news release does not constitute an
offer to sell or a solicitation of an offer to buy any securities
of Longreach in any jurisdiction in which such offer, solicitation
or sale would be unlawful. The securities referred to herein have
not been and will not be registered under the United States
Securities Act of 1933 (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold within the United States or to U.S. Persons (as
defined in the U.S. Securities Act) unless registered under the
U.S. Securities Act and applicable state securities laws, or an
exemption from such registration is available.
SOURCE Longreach Oil and Gas Limited