The Brynog-1 well spudded this morning and Mosaic said on a trouble-free basis it would take about 18 days to drill to the planned total depth of 2240m.
Brynog-1, some 25km south of Surat Town and 1km east of the Silver Springs-Wallumbilla gas pipeline, is the third and final well in the Ausam Farm-in Stage 1 program.
The second well, Downlands South-1, was a duster, while the first hole, Downslands-4, was a successful gas well and is being completed for production.
Mosaic said Ausam would fund the first $1.5 million of the Brynog-1 well costs and then contribute pro-rated interest for any costs above $1.5 million.
The well will be drilled with nitrogen and target the Permian Tinowon Sandstone gas and/or oil reservoir in a stratigraphic trap immediately south-southwest of the Churchie-Noorindoo area.
The Brynog Prospect has the potential to contain recoverable reserves of up to 15 billion cubic feet of gas or 2 million barrels of oil.
Currently, Mosaic holds a 74.4% stake in Bainbilla Block, while Santos holds 14.9% and Ausam 10.7%. After Stage 1, post Byrong-1 and $5 million expenditure, Mosaic will own 60.9%, Santos 12.2% and Ausam 26.9%.
