Speaking in a corporatefile.com.au open briefing, Arc managing director Eric Streitberg said the Perth-headquartered mid-cap was in a strong position thanks to its strong cash flow and long-term reserves base.
He said the new play-type identified by the two Drakea wells and strong flow rates of 35 million cubic feet per day from its Beharra Springs-4 well were signs the onshore Perth Basin still had plenty of life left.
“The flow rate at Beharra Springs-4 was spectacular and confirmed the presence of a separate compartment in the Beharra Springs field,” Streitberg said.
“The reservoir is obviously very good quality and we have drilled a little further into it, and it looks like the rate is well over what we have seen so far. It is a pretty spectacular flare.”
Reserves for Beharra are likely to be between 10 and 20 billion cubic feet, Streitberg said.
“Given the very strong gas market in WA, this is obviously a great result and we will now have a very good look at the 3D seismic to see if there are any more of these hidden around Beharra and particularly up onto our acreage to the north,” he said.
In the Canning Basin, Arc is drilling ahead the Stokes Bay-1 exploration well, an offset from the previous Valentine-1 well.
Streitberg shrugged-off Valentine-1’s failure to encounter hydrocarbons in the primary objective Virgin Hills formation.
“The deep objective at Valentine was tight, which was one of the main risks we have identified for the play,” he said.
“Valentine was a ‘one-off’ test of a particular play type and the rest of the program will be targeting very different and more conventional play types.”
He also added that the strong gas shows seen in the shallower Point Torment objective was a positive sign for the company’s second Canning Basin well.
“We have also recommended to the joint venture that we deepen the Stokes Bay well to the Nullara level, which is the carbonate reef level that produces oil at Blina,” he said.
“This level had strong shows in Point Torment that were never tested properly so we believe it is worth deepening the well a couple of hundred metres to test them in this location.”
Streitberg also talked up the company’s landholding in the Canning, which includes recent acquisition of 65,000 square kilometres in the Kidson Sub Basin, believed to be the oiliest part of the region.
“We now have leases covering all the major areas in the Canning and apart from resolving our differences with Rey Resources we are probably at a point where we will focus on building up our prospect portfolio and developing our discoveries when they come, rather than continuing to acquire more acreage,” he said.
“After all, we now hold more than 140,000 square kilometres – an area twice the size of Tasmania – which is more than enough to keep us busy for the next little while.”
Once the company has finished at Stokes Bay, it will move south to drill the Valhalla and Utopia prospects and then across to the Yulleroo area to follow up on the gas encountered in Yulleroo-1.
“Each of these prospects is very exciting with risked potential ranging from 40 million barrels of oil for Valhalla to over a trillion cubic feet of gas in Utopia,” Streitberg said.
“The total number of wells we are able to drill this year will depend on the weather. We don’t want to get the rig stuck when the rains start, however, a good discovery at any of these prospects would justify us putting in some all-weather roads that will give us access year round.”
