“It’s a big prospect and we have a 45% interest, so we’re very hopeful it will be a discovery as it would be worth almost as much as our market capitalisation,” Arc managing director Eric Streitberg told a corporatefile.com.au open briefing on Thursday morning.
Streitberg said the offshore prospect in TP/15 was very similar structurally to the Dongara, with a comparable cross fault seal configuration. But it is this fault seal integrity that poses the biggest risk for the prospect.
After Moondah-1, the company will stay in TP/15 to drill the lower risk Frankland-1 well, in which it holds a 6% stake. Streitberg said this prospect looked very similar to Cliff Head, which is currently producing 12,000 barrels of oil per day.
Then if timing permits, the ENSCO rig will move to spud Perseverance 1 in WA 325P in which Arc has a 20% interest. Perseverance is well defined structurally, but has a high reservoir risk.
Streitberg says his company plans to exploit current oil prices by starting the onshore drilling campaign with three development wells, the first of which, Jingemia-8, is due to spud this week.
“In the onshore, the three development wells are hopefully low risk and will give us a combination of incremental and accelerated production,” he said.
“We expect the [Jingemia-8] development well to produce several thousand barrels of oil per day so hopefully we will get Jingemia back up to the budgeted 5000 barrels a day.
“Hovea and Eremia have been declining exactly as predicted, but the other two development wells will help arrest that and we would hope to get at least 1000 barrels a day out of each well.”
The drilling program will then move into the exploration phase, which Streitberg says ranges from Drakea, a relatively high risk and very big structure on the same fault trend that is due south of Hovea, to Lyginia, which is lower risk, sits just south of Eremia and is probably of a similar size.
This time around, Streitberg said Arc would not replicate its previous drilling program, in which 28 wells were drilled back-to-back.
“That was an amazing achievement and one that will be hard to replicate. We’re planning on drilling a well every three to four weeks and we want to be able to take the rig to the Canning Basin in April/May next year,” he said.
“That means we should drill about 10 wells in the Perth Basin although we have about 20 potential targets.”
Meanwhile, Streitberg said Arc would use the same persistence that paid off for the company in the Perth Basin, to hopefully unlock sizeable petroleum resources in the under explored and “undervalued” Canning Basin.
“It’s a huge area with several working petroleum systems and very large structures including two major areas of salt tectonics,” he said.
“If it was located somewhere exotic internationally it would be seen as a major prize, but because it’s in Australia and has not been explored properly, it has been undervalued.
“We don’t underestimate the challenge of finding the sweet spot and hope we can do so early in the program, but we will persevere as we have done in the Perth Basin.”
He added that Arc, which secured a large acreage in the area in May, has defined at least five major targets that will test known oil and gas systems, with “many more” leads being identified as data analysis continues.
