IPM incremental petroleum limited

eight new explorations licences in turkey

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    ABN: 38 115 711 601
    20 Howard Street PERTH WA 6000 Po Box Z5490 PERTH WA 6831
    Ph: +618 9481 8696 Fx: +618 9481 2394
    23 May 2008
    Australian Securities Exchange (ASX)
    By ASX online
    • Incremental awarded eight concessions in under-explored basin in
    Central Turkey
    • Huge untested structures
    • Multiple oil and gas shows
    • 150 million barrel or 1 TCF gas potential
    Incremental Petroleum Ltd. (IPM) is pleased to announce that eight
    exploration licences in Central Turkey have recently been awarded
    (Figure 1). These licences significantly enhance Incremental's exploration
    opportunities with significant oil and gas upside.
    Figure 1. Licence locations and focus areas
    ABN: 38 115 711 601
    20 Howard Street PERTH WA 6000 Po Box Z5490 PERTH WA 6831
    Ph: +618 9481 8696 Fx: +618 9481 2394
    A number of prospects and leads have already been identified from
    geological and geophysical studies. All licences are located within the
    under-explored Tuz Golu Basin, south of Ankara. The large basin is
    significantly under-explored, with only fifteen deep wells. Shows of oil
    and gas have been noted in most of the wells, and both oil and gas has
    been tested at sub-commercial rates.
    A number of significant prospects have already been identified from old
    seismic data.
    The ‘Ernest’ prospect is situated 4 km updip of a well with gas shows. This
    well was drilled into the caprock of the underlying reservoir system and
    therefore did not encounter producible hydrocarbons. The potential
    reservoir in the ‘Ernest’ structure is characterized by thick stacked
    sandstone and shale sequences with potential to reservoir a trillion cubic
    feet (Tcf) of gas or 150 million barrels of oil.
    Figure 2. Cross-section of prospect ‘Earnest’
    Oil prospect ‘Wesley’ is a shallow anticlinal trend adjacent to a number
    of oil seeps, with tar formation (biodegraded oil) interpreted as the
    sealing mechanism for the prospect. Several analogue billion barrel
    oilfields exist in other parts of the world with a similar seal and geometry.
    Further work is required to evaluate the volume of hydrocarbon fill in this
    and adjacent structures, but the potential is in excess of 500 million
    barrels.
    Prospect Proposed well
    • Closure of >30,000 Acres
    • 4 km Updip of Gas Show Well
    • Oil and Gas Shows and Seeps in Basin
    • Thick Sands as Reservoir Objectives
    TCF GAS POTENTIAL
    150 MMB OIL POTENTIAL
    Well with gas show
    ABN: 38 115 711 601
    20 Howard Street PERTH WA 6000 Po Box Z5490 PERTH WA 6831
    Ph: +618 9481 8696 Fx: +618 9481 2394
    Figure 3. Cross-section of prospect ‘Wesley’
    The excellent fiscal regime in Turkey, plus the location of these
    concessions in the vicinity of the energy-hungry city of Ankara suggests
    that even a small oil or gas discovery in this area will be commercial.
    Gerry McGann, Incremental’s managing Director said “the granting of
    the bulk of this untapped basin with substantial prospectivity plus the new
    major US acquisitions together provide substantial engines for the growth
    of Incremental within the next 3-5 years. These new projects have the
    potential to build on and then surpass Incremental’s Selmo oilfield
    production base”
    Incremental currently hold 100% in each concession. A US based group
    will uptake a 50% interest in this project subject to certain conditions,
    including specialist technical services, some funding and meeting
    regulatory requirements. Incremental and the new partner plan to farmout
    much of the ongoing work and expenditure on these prospects, and
    expect the ongoing seismic and well work to be completed at no
    significant cost to either party.
    Gerard McGann
    Managing Director
    Seepage Prospect
    • 2,500 m Thick Sandstones as Reservoir Objectives
    • Potential for 500 MMBO Reserves
    • Many Oil and Gas Seeps Along Anticline
    Projected existing well
    500 million BBL OIL POTENTIAL
    Proposed well
    ABN: 38 115 711 601
    20 Howard Street PERTH WA 6000 Po Box Z5490 PERTH WA 6831
    Ph: +618 9481 8696 Fx: +618 9481 2394
    About Incremental Petroleum
    Incremental was formed by a syndicate of petroleum industry experts in 2003
    and listed on the ASX on 20 October 2005.
    Its key strategy is to acquire low risk oil and gas assets and apply world class
    technical expertise to develop the assets and their productivity.
    Incremental’s major producing asset is the Selmo oilfield in Turkey, the
    second largest oilfield in Turkey by cumulative production. The field has
    estimated oil initially in place of approximately 500 million barrels, with a low
    recovery factor (about 82 million barrels produced to date).
    There are 47 wells at Selmo, 22 of which are still producing. The oil is sold at
    the field gate and sent by truck to a refinery 40km away.
    There is considerable scope for improved production and recovery at Selmo
    – an oilfield which has a long life and provides an excellent net cash flow.
    A second major asset in Turkey is the Edirne gas project in which Incremental
    has a 55% interest. Seven gas discoveries have been made in seven wells
    drilled in 2007 and 2008. The project is proceeding rapidly to
    commercialisation.
    Other assets in Turkey include a major exploration area in the Tuz Golu basin
    south of Ankara.
    Incremental paid a maiden dividend of 3 cents per share in October 2006, a
    capital return of 5 cents per share in May 2007, an interim dividend of 3 cents
    per share in October 2007 and has declared a final dividend of 3 cents per
    share payable in July 2008.
    In May 2008 Incremental finalised agreements with a US private entity to
    acquire interests in five projects, totaling more than 19,000 acres in the prolific
    hydrocarbon region of the San Joaquin Basin in central California, USA.
    Funding of the acquisition was made by Placements totaling $10,000,000 to
    local and overseas institutional and sophisticated investors, and a Share
    Purchase Plan.
    Incremental has offices in Perth in Western Australia and in Istanbul and
    Ankara in Turkey.
    ABN: 38 115 711 601
    20 Howard Street PERTH WA 6000 Po Box Z5490 PERTH WA 6831
    Ph: +618 9481 8696 Fx: +618 9481 2394
    Locations of Incremental’s projects
 
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