Avenue Energy, Inc., a subsidiary of US-based Avenue Group, Inc., was informed by Avenue's Joint Venture partner and drilling operator in Turkey, Aladdin Middle East, Ltd., that Avenue's first exploration well, the Tosun-1 Well in the Gaziantep petroleum district of Southeast Turkey, has encountered oil. Testing continues at Tosun-1 to determine if the discovery will become commercially viable.
The top of the primary drilling objective, the Derdere Formation, was encountered at 10,709 feet and a core was cut over the interval 10,717 to 10,727 feet, recovering three feet of fractured limestone with oil bleeding from the fractures.
The Derdere Formation is oil productive in the adjacent Karakus and Cendere oil fields. Tosun-1 was deepened to the current depth of 10,758 feet after which an open hole Drill Stem Test (DST-3) was run over the interval 10,697 to 10,758 feet.
The test recovered one stand of drill pipe filled with oil (32-34 API light oil), two stands of drill pipe filled with drilling mud with abundant oil shows and 5 stands of drill collars with salty water (30,000 ppm Cl) with oil and gas shows.
Following the test, the Operator commenced replacing the drilling mud in the well bore with water in order to lower the hydrostatic pressure in the well and reverse circulated the hole. During conversion of drilling mud to fresh water, approximately 100 barrels of light oil (between 32 and 34 API gravity) with gas was pumped into the mud pit, indicating that the well had started to produce oil against the lowered mudweight.
The operator is preparing to swab the well, and ongoing operations may include wireline logging, identification of the oil and water zones, followed by running 7 inch casing (if warranted), perforating of the potential payzone(s), acidizing of these zones and production testing.
At this early stage, although the results to date are encouraging, no determination can be made as to whether the discovery will lead to a commercial development at Tosun-1.
Avenue has earned a 45 percent working interest in the Tosun-1 well and the Tosun License.
The Company also announced that it has recently completed a private placement to accredited investors of 16,000,000 shares of the Company's restricted common stock for $4 million.
S.B. Cantor and Co., acted as the exclusive placement agent for the Company in connection with the offering. Proceeds from this placement have and will be used primarily to fund its oil and gas activities, including the Tosun 1 well and the Company's working capital requirements. Certain registration rights were also granted to investors participating in the private placement. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
