Turkey 2021

In October 2020, UKOG completed a Participation Agreement and Joint Operating Agreement with Aladdin Middle East Ltd (“AME”), an independent oil company with 60 years of operational experience in Turkey, to take a 50% non-operated working interest in the 305 km² Resan Licence.

UKOG is taking an active technical role in a 4-well oil appraisal and step-out exploration drilling programme designed primarily to assess the commercial viability of the significant Basur-Resan oil discovery. The transaction was approved by the Turkish government and completed in January 2021.

The Resan Licence lies within the SE Anatolian basin, a geological continuation of the prolific Zagros "fold-belt" petroleum system within the foothills of the Taurus-Zagros mountains in Iraq, Iran and Turkey, one of the Middle East's major oil producing areas. Multiple producing oil fields lie to the immediate west and south-east of the Licence, containing significant proven recoverable reserves.

UKOG quickly built on this exciting entry into Turkey by submitting an application for three further exploration licences covering four blocks, again with a 50% interest and AME as operator. Disappointingly, however, the Turkish government decided to award the licences to the Turkish national oil company, TPAO.

Construction of the drilling pad and access road for the Basur-3 (“B-3”) appraisal well began in March 2021 and was completed in May. The Turkish Energy Ministry approved drilling of B-3 in April and well was spudded on 26th June. The directional drilling assembly became stuck in the 12¼” hole section whilst pulling out of hole. The rig performed a successful recovery or ‘fishing’ operation to free the drilling assembly and return it safely back to surface. The incident occurred after the well had made good progress, reaching a drilled depth immediately above the Garzan and Mardin target objectives, which remain untested.

AME advised that, to achieve the well’s primary objective of appraising the Basur-1 oil discovery, a deviated mechanical sidetrack, B-3S, is planned, the existing 12¼” hole section being considered unsuitable for onwards drilling. AME further advised that, to ensure the sidetrack is optimally located, they plan to pause further drilling until after the acquisition and processing of the new seismic data over the sidetrack’s envisaged trajectory.

The B-3 appraisal well was the first modern well designed to properly appraise and assess the extent and commercial viability of the Basur-Resan oil pool discovered in the 1950s-1960s. Its primary objectives were the naturally fractured and dolomitised limestone rocks of the Cretaceous age Garzan and Mardin Formations, which are productive at our partner AME’s East Sadak oil field, whose western edge is some 20 km to the southeast and along the same geological anticlinal trend.

Active planning of B-3S is well underway and initial discussions with prospective drilling rig contractors have taken place, with detailed well planning and contractor selection progressing. In the interests of maximising cost efficiencies, plans are in place for surplus UKOG-owned casing to be transferred to the B-3S site for utilisation during drilling. It is planned that the well will commence upon receipt and interpretation of the fast-track seismic processing,

Good progress has been made post period by Viking Geophysical Services (VGS) in acquiring the 2D seismic programme. VGS’ acquisition programme is being overseen by an expert quality control consultant and a first tranche of acquisition (Phase 1) has been completed. Priority has been given to process 3 lines covering the B-3S area and trajectory plus the proposed new Resan-6 drilling location. Existing legacy data has also been recently reprocessed and a pre-stack depth migration process has commenced aimed at sharpening the seismic imaging of faults that may be encountered along the B-3S trajectory.