Transmeridian (TMY) update #23
Posted by intelledgement on Thu, 03 Jul 08
Our ailing E&P with the Kazakhstani oil they can’t figure out how to access announced today the acquisition of additional problematic oil fields in Russia. Transmeridian Exploration (TMY) management stated that the company has take a 50% interest in both a second field and an undrilled anticline in trend with its Gasha Field in the Dagestan region of Russia. According to the press release, TMY have “concluded negotiations with its partners in DNK…on the joint operations of its properties in the region and signed a joint operating agreement. The agreement calls for an initial work program which includes a 200 square km 3D seismic program as well as re-entry of four wells and drilling of two new evaluation wells.”
These properties were developed and eventually abandoned by the Soviets after 20 years in the mid-70s due to the “complexity and difficult drilling conditions presented by the geological formations encountered in the area,” according to the press release. During those 20 years, the wells did produce three million BBLS and 4.4 BCF of natural gas, and the Russians estimate there are 25.6 million additional BBLS of recoverable oil. Again according to the press release, “results of the company’s evaluation of the resource potential of both fields with the use of more refined reservoir parameters and additional information gained from recent well test lead us to believe there could be at least a fivefold increase over the currently reported resource potential.”
Given TMY’s history of subpar results when attempting to develop challenging properties—not to mention their current financial challenges—we will temper our enthusiasm here.