PEL 111 JOINT VENTURE

(Impress 40% Working Interest)

 

PEL 111 is located on the Western Margin of the Cooper Basin and covers 1,174 square kilometres. The permit is located to the north of, and adjacent to, PEL 104. The permit surrounds the Santos operated Charo Oil Field which is currently in production from the Birkhead Formation from two wells. The permit is prospective for both oil in the Jurassic sequences on the Western Margin and gas in the deeper Permian sequences in the central and eastern portions of the permit.

 

The Mollichuta 3D seismic survey covered the southern part of the permit. The survey data, which will be available for interpretation in the first quarter of 2010, has been designed to mature prospects for drilling and to identify channel sandstones within the Birkhead Formation.

 

Two wells, both oil discoveries, have been drilled in the permit in the last year. The first of these, Warhawk-1, drilled in September 2008, encountered a 17 metre oil column in relatively poor quality Birkhead Formation sandstones. Two attempts to open hole test the reservoir section failed for mechanical reasons but wireline pressure sampling indicated moveable oil is present. Consequently, the well was cased and suspended as a potential future oil producer.

 

Snatcher-1 was drilled in June 2009 by the Century Rig No 2 close to the Santos operated Charo Field in PPL 176. The well was drilled to evaluate a potential intra Birkhead Formation channel defined by 3D seismic. The seismic was acquired by Santos and that part of the survey that covers PEL 111 was provided to the Joint Venture at no cost under the provisions of the Petroleum Act.

 

Snatcher-1 encountered a 15 metre oil column in well developed Birkhead Formation sandstones. An attempt to drill stem test the reservoir failed due to mechanical reasons but wireline pressure sampling showed moveable oil was present and a sample of 48 degree API oil was recovered. The well was completed using a workover rig and placed on a short term production test. During the testing the well flowed at rates of 218 BOPD on a 11/64 inch choke. In all, over 900 barrels of oil was recovered during these operations. The well has been completed for production and is expected to produce at rates up to 400 BOPD on pump commencing in December 2009.

 

The Joint Venture also agreed to drill Snatcher-2, 900 metres to the northwest of Snatcher-1, to evaluate a separate sand body defined by the 3D seismic. This well spudded on 2 August 2009 and intersected a 19 metre oil column in well developed Birkhead Formation sandstones. The well has been completed for production and is expected to produce at similar rates to Snatcher-1 on pump.

 

Subsequent to the end of the September 2009 Quarter, the Joint Venture elected to drill Snatcher-3 to further appraise the Snatcher oil accumulation. Snatcher-3 spudded on 26 October 2009, using Century Rig 3 to test the Birkhead channel system identified in the previous two wells at a location approximately 800 metres to the northwest of Snatcher-2. The well was completed as a producer and is expected to be on production in eary 2010. 

 

It is planned to initially truck the Snatcher oil to Moomba from a facility located near Snatcher-2.