Qara Dagh

Genel reached agreement to acquire stakes in the Chevron operated Qara Dagh block, in the Kurdistan Region of Iraq, in January 2019.

Genel acquired 40% equity in the Qara Dagh appraisal licence and became the operator through a carry arrangement, covering activity for the QD-2 well.

Qara Dagh offers an exciting appraisal opportunity. The QD-1 well, completed in 2011, tested light oil in two zones from the Shiranish formation. The QD-2 well location has been selected c.10 km to the northwest of QD-1, and will test a more crestal position on the structure with a high angle well to maximise contact with reservoir fractures.

Civil construction works have made good progress in preparation for the upcoming drilling operations, and the well pad and camp have now been completed. The well will test the crestal portion of the prospect which, based on a rigorous re-mapping exercise, has a mean prospective resource estimated by Genel at c.400 MMbbls. Genel estimates that the downdip segment tested by the QD-1 well defines a 2C resource of 47 MMbbls.

The QD-2 well was on track to spud in Q2 2020 prior to COVID-19 impacting supply chains and the movement of people in to the KRI. Due to ongoing uncertainty caused by COVID-19, Genel notified the KRG of the occurrence of a force majeure event preventing the Company from being able to perform its contractual obligations as scheduled.

While challenges caused by COVID-19 remain, the increased certainty in the operating environment, and Genel’s ability to operate under the expected level of restrictions, has allowed the lifting of force majeure at Qara Dagh. This has allowed Genel to proceed with approvals for activities necessary in order to reach a spud date for the QD-2 well in Q1 2021. The QD-2 well is expected to cost c.$30 million in 2021.