But news of the extending testing at Cardiff-2 wellsite has been tempered by the writing down to zero of all proved and probable reserves associated with the problematic Kahili-1A-B well further north.
Wellington-based Austral last night said Cardiff-2A deep gas well had reached its 4931m target depth and logging of the entire Kapuni formation interval below 4000m completed. As well, 7-inch casing to total depth had been set and cemented across all potential pay zones, in preparation for initial production testing.
Austral chief executive Dave Bennett said the Cardiff-2A logs were generally of good quality, and confirmed the presence of all reservoir units previously intersected in Cardiff-2, which penetrated the Eocene-aged Kapuni formation approximately 175m from Cardiff-2A.
“Similar indications of hydrocarbons in reservoir are observed in both wells. While a number of likely pay sands of varying thicknesses are present in the well, the initial production testing program will concentrate on three main zones, all of which are established gas or oil producers in offsetting fields.”
The first test zone was approximately 60m deep near 4800m, while the second and third zones extended approximately 20m and 15m respectively, near 4100m.
Bennett said the start of the testing program was expected to be in April, though that depended on the release of testing and fraccing equipment presently being used by another operator at a nearby field.
Austral (which holds a 25.1% stake in the Cardiff deep gas rights) would be free-carried through the initial approximately US$2.5 million of testing expenditures, which were to be paid for by Genesis Energy under the terms of their farm-in agreement.
"Having had to abandon Cardiff-2 and then sidetrack the Cardiff 2A well has certainly increased our costs for this project. But the silver lining is that we now know we have continuity over the key expected pay zones for at least 175 metres; and indeed further when the older logs from Cardiff-1 are included.
“This valuable information could only have otherwise been obtained by drilling an entirely separate well. We are looking forward to the upcoming testing program, which will flow, pressure fracture and then flow again, each test zone sequentially.”
However, a recent report by Canadian independent petroleum engineering consultants Sproule International had written net proved and probable reserves associated with the Kahili-1A/B well (which Austral also operates with a 45% interest) down to zero. The Sproule report recognised a Kahili-2 well might establish new reserves higher on the structure.
“Austral is writing down the carrying costs on this permit accordingly,” Bennett said.
Meanwhile, a field inspection of the Douglas drill site in Papua New Guinea had enabled drilling rig options to be assessed and site preparation to be scheduled to start next month. Douglas-1 was targeted to spud mid-year to test a mapped structure extending over 60 sqkm. Austral has a 35% interest in Douglas and is being carried through this phase of exploration.
