Geochemical studies indicate that the Cretaceous Carbonate Play is sourced from the Oligocene aged Maykop shale interval, where thickness can exceed 2,000 meters and total organic carbon can be as high as 11 percent.
The primary reservoir targets are located in the Jurassic and Cretaceous age carbonate rocks and the secondary reservoir targets are in the Miocene and Pliocene age clastic rocks.
Analysis and mapping undertaken by Frontera, based on historic as well as new seismic data acquired by the Company and new geologic outcrop field work, indicates that gross unrisked potential recoverable resources in the Basin Edge “B” Prospect and the Basin Edge “C” Prospect could be in excess of one billion barrels of oil from both the deeper Cretaceous intervals as well as from the shallower Tertiary section. These resources have been independently evaluated by the firm of Netherland, Sewell & Associates, Inc. and have been classified as attractive resource potential.
Many successful exploration wells have been drilled in the upper levels of the Tertiary interval of the Kura Basin over the last 70 years based on the presence of oil seeps and mud volcanoes at the surface. However, Frontera’s geologists have identified a new play in the deeper Mesozoic Era, Jurassic and Cretaceous intervals where the reservoirs are principally believed to be fractured carbonates. These rock types constitute some of the best reservoirs in the world and production from fractured carbonate rocks is typically characterised by very high flow rates.
Where the Tertiary interval can be as thick as 15,000 meters, and the younger overlying source rock is mature, the Mesozoic Era intervals have typically been beyond drilling depth. However, new 2D and 3D seismic techniques have resulted in companies being able to image prospects in this basin where the deeper Mesozoic carbonate section can be economically reached by conventional drilling.
In 2003, CanArgo Energy completed drilling its Manavi #11 well on trend and to the east of the Basin Edge “B” Prospect and the Basin Edge “C” Prospect. The well reached total depth at 4,500 meters with primary pay zones in the Cretaceous carbonate interval of the Mesozoic Era section, as well as secondary targets in the upper and middle Eocene. CanArgo Energy has reported that the well tested significant volumes of oil and gas.
The Manavi #11 well tested a feature which indicated that the carbonate reservoirs appeared to be fractured in sections previously thought to be too deep as a drilling objective. Frontera has identified the same Cretaceous interval as being prospective throughout the Cretaceous Carbonate Play in the northern portion of Block 12. Within the Cretaceous Carbonate Play, similar structures to those successfully drilled by CanArgo Energy have been identified. Visible on old and newly acquired seismic lines in Block 12, as well as in outcrops, the carbonate rocks appear to overlie and are positioned just above the Maykop source rock. In addition, the section appears to be at a relatively shallower depth in Block 12 of between 2,000 meters and 2,500 meters and should, therefore, be more economic to access.
In June of 2005, Frontera acquired an extensive gravity survey over the “C” Prospect and followed this in August with the acquisition of approximately 165 kilometers of 2D seismic. Processing and interpretation of this new data revealed an independent four-way structural closure of approximately 55 square kilometers in size. As a result, it was decided to prioritize and focus on this large prospect within the broader Basin Edge Play Unit.
Based on the encouraging results of the 2D seismic program, Frontera acquired an 80 square kilometer 3D seismic survey over the “C” Prospect that was completed in June 2006. Processing and interpretation of the 3D survey confirmed the prospect to be larger than initially estimated and provided new detailed imaging of its lateral and vertical limits, as well as the extensions of fault blocks and possible fracture systems within the prospect. The 3D data confirmed that the prospect has a structural height of approximately 1,000 meters. Most significantly, the primary target Cretaceous reservoirs were identified on the basis of seismic attributes at depths from 2,000 meters to 3,700 meters. The use of amplitude with offset technology (AVO) in the processing of the new data also suggest the possible presence of hydrocarbons within structural closure.
Utilizing this new information, the drilling of the first well at the “C” Prospect – the Lloyd #1 well – commenced on September 17, 2007 and reached a measured depth of approximately 3,000 meters in December 2007. The well was designed to evaluate multiple horizons and target final completion in the Cretaceous reservoir targets at total depth of as much as 3,700 meters.
Multiple sidetracks were subsequently drilled from the Lloyd #1 well to evaluate up-dip portions of the “C” Prospect structure. While drilling, these wells encountered multiple potential reservoirs as well as multiple hydrocarbon shows throughout the Tertiary age section of the well. Drilling also revealed the unexpected presence of important additional lower-Tertiary age geologic formations, consisting of Oligocene and Eocene age rocks. These formations are known to contain prolific reservoirs in fields on trend with the “C” Prospect within the Kura Basin.
Based on unexpectedly difficult drilling conditions associated with the Eocene formation in all sidetracks, drilling operations were suspended in April 2008 in favor of a new approach to drilling this section of the prospect. Frontera’s previously estimated schedule to secure an alternate rig for continuation of drilling operations at the “C” Prospect’s Lloyd #1 well is currently being redesigned. Options for the continuation of exploration efforts at this significant prospect are currently under consideration.
Analysis of the 3D seismic data related to the “C” Prospect prior to commencement of drilling indicated that the primary target reservoir objectives, identified on the basis of seismic attributes, could occur at depths from 2,000 meters to 3,700 meters. Data thus far gathered from the Lloyd #1 wells continues to support this model. The discovered up-dip presence of the Oligocene and Eocene sections provides further confirmation that the geology is relatively intact and continuous within the “C” Prospect and that the primary objective Cretaceous section still lies ahead within the originally predicted depth intervals.
In 2005, Frontera also commenced the acquisition of approximately 170 kilometers of 2D seismic data acquired over a second prospect within the Basin Edge Play Unit, known as the “B” Prospect. This survey was completed in early 2006. Processing, interpretation and mapping of this data was completed, and Frontera has an objective of undertaking further geophysical work and drilling operations to evaluate this prospect.
Frontera’s objectives within the Basin Edge Play Unit remain focused on accessing the resource potential that is estimated by the independent consulting firm of Netherland, Sewell and Associates to be in excess of one billion barrels of recoverable oil for the “B” and “C” Prospects. Of this total, prior to the acquisition of new seismic data, the “C” Prospect was estimated to contain as much as 500 million barrels of recoverable oil. Frontera’s primary reservoir targets are located in the Cretaceous age carbonate rocks, with secondary reservoir targets in the Tertiary age clastic rocks as well as the Jurassic carbonates.