Lakes said this drilling program would provide a better understanding of the Strzelecki Group formation, which occurs across most of its Gippsland Basin permits.
“The sophisticated logging suites in Boundary Creek-2 will help us to determine the best zones that are suitable for fracture stimulation and gas production,” Lakes chairman Robert Annells said.
“In the future, the specialised logging will allow us to more efficiently pick and evaluate these target zones.”
With sediments of Lower Cretaceous age, the Strzelecki Group consists of a very thick sequence of non-marine sandstones, claystones and intermittent coals and conglomerates towards the base.
Following previous drilling in the basin, Lakes Oil said it had found some of the sandier units within the formation have better permeability and porosity than others.
Annells said Boundary Creek-2 has encountered coaly units in the lower Strzelecki Group, which appear to be in the oil generation window.
“Although the Boundary Creek-2 well encountered gas at low levels continually from a depth of 244 metres to its current depth of 2,341 metres, it is not our intention to test the well at this stage,” he said.
“Rather, this well was designed to fully evaluate the geological properties of the Strzelecki Group Formation over its entire thickness and to reach the Rintouls Creek Sandstone at the base.”
Only one other well has drilled through a thickness of this size in the Strzelecki Group, he said. The Wellington Park-1 well, drilled in 1962 in the deepest part of the Seaspray Depression to the east, encountered 2,633 metres of the formation without reaching the base.
The company said more than 40 sidewall cores being obtained from the Boundary Creek-2 well would be sent to specialist laboratories for analysis of permeability, reservoir porosity and other factors to accurately “ground truth” the parameters measured in the electric logs, Lakes said.
The Hunt rig has reached its maximum capacity depth and will be upgraded to a bigger rig upon availability, the company said. Further drilling has been suspended in the meantime.
Boundary Creek 2 well lies on the eastern end of the Baragwanath Anticline, a huge structure extending 70km to the west, encompassing the Latrobe Valley, and continuing into the adjoining permit PEP 166, in which Lakes holds a 50% interest.
Lakes said the Baragwanath Anticline could be a “sleeping giant,” with the potential to contribute clean Strzelecki gas for use in the Latrobe Valley and the region.
Annells said discussions were underway with two power companies to participate in PEP166, while plans to drill the first well in the permit early next year with partner AusAm Resources.
Meanwhile, Lakes is planning to spud a Wombat 2A well in early 2006 near its successful Wombat-2 well in PEP 157, subject to funding and securing a suitable rig.
Wombat-2, already shut in ready for production, is currently flowing at a sustainable rate of 680,000 cubic feet of gas per day after a successful hydraulic fracturing.
While Wombat-2 only accessed one of the three potential producing zones, Wombat-2A will aim to assess all three zones, as well as any additional zones, Lakes said.
