PRL 15 JOINT VENTURE

Growler Field (Impress 40% Working Interest) 

The Growler Field, located on the western side of the Cooper Basin, was discovered by Growler-1 in 2006 and has been successfully appraised by four wells all of which have been completed as oil producers. The field has been on Extended Production Test (“EPT”) since March 2008 and cumulative production to the end of September 2009 is now in excess of 380,000 barrels of oil. Until recently, the production level from the field has been restricted by surface facility constraints which limited production to 1,000 barrels of fluid per day (BFPD).

The Growler Field is contained within Petroleum Retention Licence 15 (PRL 15) which was granted on 6 May 2008. The retention licence will be converted to a production licence once the full field extent has been established.  

The field commenced production in March 2008 from two wells (Growler-1 and Growler-2) at a combined pumping rate of 200 BOPD, and this rate was sustained, with only minor amounts of water production and no significant drop in reservoir pressure, until September 2008. Encouraged by the initial results of the testing program, the Joint Venture agreed in July 2008 to further appraise the field and Growler-4, followed by Growler-3, were drilled in August and September 2008. Both wells encountered full oil columns in the Birkhead Formation with reservoir sandstones that were much better developed than those in the original wells. Growler-3, for example, flowed at a rate of 1,673 BOPD on a one inch choke during a Drill Stem Test.

Consequently, the Joint Venture agreed to drill Growler-5 on the eastern side of the field following the completion of the wildcat exploration program in the surrounding exploration permit PEL 104. Growler-5 was drilled in December 2008 and also encountered well developed sandstones in the Birkhead Formation with a full oil column. The well appraised the eastern side of the structure and the successful intersection of a full oil column enabled booking of additional reserves into the Proved and Probable category. The well is currently producing over 500 BOPD under natural flow.

The Growler-3, 4 and 5 wells have been completed and are producing to the Growler Production facility under natural flow on restricted chokes, although Growler-4 was placed on pump in late August 2009. By the end of June 2009, the best well, Growler-3 had produced over 140,000 barrels of oil since coming on line in late September 2008.

The Growler surface facilities, which had been designed for the EPT and which were not a full production facility, restricted overall production from the field to approximately 1,000 BOFD. Consequently, the Joint Venture agreed in late 2008 to expand the facility’s capacity to 2,000 BOFD. The works were completed in June 2009 and included additional storage and fluid separation, additional water handling capacity, an upgraded oil loading facility and additional accommodation for the field operators and oil transportation crews.

During the third quarter of 2009 the wells will be selectively tested at variable choke sizes to determine the optimum rate for each well. All produced oil is trucked along the Growler Production Road, then via Santos roads, to the Santos main production facility at Moomba.

The oil column at the Growler Field has a height which is larger than the size of the closure that can be mapped on the basis of the existing 2D seismic data. Therefore, the ultimate areal extent of the field is yet to be determined. Consequently, reserves for the field have been assigned on the basis of representative drainage circles around each well. The size of these circles has been determined by analysis of the field development practices used by other operators of analogous oil fields in the Cooper Basin.

The Joint Venture has agreed that a more formal reserves determination will be made for the field once the final processed Mollichuta 3D seismic survey data, has been analysed.