On Monday, permit operator Norwest Energy, Australian Worldwide Exploration and Adelphi Energy said the well had intersected both its primary target, the Montara Sandstone, and one of its secondary targets, the Upper Vulcan Formation, without hydrocarbon shows.
Since then, the Ocean Bounty rig has drilled ahead into the remaining secondary target, the Plover Formation, which was also dry.
Norwest CEO, Joe Salomon, said that while the results were disappointing, the company had other projects it was working on.
“We viewed Magnolia as being very prospective, but the risks were always known,” Salomon said.
“We look to new drilling opportunities in the short term in the Perth Basin planned for April (TP/15), in Kentucky which is currently drilling, and in West Virginia which is soon to commence.”
Salomon said Norwest had almost no financial exposure to the well, and the company’s overall strategy and portfolio was intact despite the well results.
Adelphi executive chairman, Alex Forcke, said Magnolia-1 was the first in a series of high impact exploration wells in the company’s portfolio.
“Until all the well results have been received and fully integrated into our geological model, it is too early to make any definitive assessment or comment about the remaining prospectivity of our AC/P32 permit,” Forcke said.
“In addition to our large Sugarloaf prospect in the onshore Gulf of Mexico and our highly prospective exploration interests in Yemen, we have also been actively pursuing other near term drilling opportunities to further build on and appropriately balance our asset portfolio. We expect to be able to conclude and announce one of these potential deals in the near future.”
With $10 million in cash reserves after funding its share of the Magnolia-1 well costs, Adelphi said it remained in a strong financial position to fund its other exploration commitments and pursue additional high impact projects, according to Forcke.
Magnolia-1 in AC/P32 was drilled in about 97 metres of water, about 19 kilometres northeast of the Montara oil field and 28 kilometres southeast of the Skua oil field.
Participants in the well are: Coogee Resources (Ashmore Cartier) Pty Ltd 20% operator for the well; Norwest Energy NL 19.6% (permit operator); Bounty Oil and Gas NL 10.4%; Adelphi Energy Limited 15%; AWE (Timor Sea) Pty Ltd 10%; and OPIC Australia Pty Ltd 25%.
