The company has also boosted production at its Fairview coalbed methane operation in central Queensland by up to 15%.
The average well at Fairview is producing at 0.9TJ per day, up from 0.8 at the time of the acquisition.
Next year, Santos is planning to run a new pipleine from Fairview to Wallumbilla and ramp up to 90 producing wells, up from 52 today, the firm’s executive vice president of operations, Jon Young, told a corporatefile.com.au Open Briefing.
Young also said Santos could spend up to A$900 million between 2006 and 2010 on a Cooper Basin program. Santos' share of the 75 million barrels being targeted would be about 50 million barrels.
“Our strategy is to utilise the 3D seismic data to target a pattern drilling operation with gathering facilities based on a modular design and modern materials," Young said.
The company has contracted three ‘state-of-the-art’ truck-mounted Canadian drilling rigs, the first of which will arrive in Australia this month, with the other two due throughout next year.
Santos says these automated light duty rigs can drill more wells at a lower cost, and leave a smaller footprint than before.
In 2006, Santos has committed A$160 million for initial infrastructure costs and the drilling of 100 wells, targeting 6 to 7 million barrels of 2P oil reserves. If successful, the company could spend a further A$110 million drilling another 70 wells targeting net 2P reserves of 4 to 5 million barrels.
“With our extensive knowledge of the Cooper Basin and the application of modern seismic technology, the geological certainty of this program is high, with the focus on being able to produce the oil in a cost-effective manner,” Young said.
Managing director and CEO John Ellice-Flint said pilot programs in the JALBU area and at Merrimelia have already successfully demonstrated the new technologies.
“The beauty of this program is its scalability, with the ability to tailor the rate of investment based on the success of the program,” Ellice-Flint said.
“We know that the concepts work and that there is a great deal of oil present, so we are excited at the prospect of developing this program into a long term contributor to our bottom line,” he said.
Santos was moving quickly to increase production at its recently acquired Farview coalbed methane field in southeast Queensland, Ellice-Flint said.
“Fairview is a world class resource and given our existing infrastructure and leading position in the eastern Australian gas markets, we are well positioned to maximise the value of our investment,” he said.
Since taking over operatorship at Fairview, Santos has increased production by 10 to 15%, with production forecast to reach 45TJ per day by the year-end, Young said. In addition to the 52 producing wells, the project has a further 24 completed wells awaiting connection.
Next year, Young says the company will also contribute A$94 million towards the installation of a new 130km pipeline from Fairview to Wallumbilla, expanding the existing gas processing facilities and the drilling and connection of a further 24 wells.
“By the end of 2006, there will be approximately 90 producing wells, and field capacity will have increased to around 70TJ per day,” he said.
By 2011, gross production was forecast to reach about 200TJ per day by 2011, with Santos’ share at about 140TJ per day, he said.
