Roc, the operator with a 40% interest, told the ASX this morning that the program would comprise at least two production tests through liner and drilling a sidetrack well.
Most recent log data, including pressure and sampling information, has confirmed three separate gross hydrocarbon columns, with a total gross thickness of 297m. Of this, 95m is considered net hydrocarbon pay with reservoir porosities averaging about 20%, the company said.
Roc chief executive John Doran told EnergyReview.net the Wei structure so far appears to have all the characteristics of the “perfect field”.
“Most fields cover larger areas, and so when you look on the map, this one looks quite modest,” he said.
“But it’s not until you look at it in 3D or vertically that you realise how significant it is. In terms of development, the perfect field is one that covers a small area with a large volume of oil.”
In addition, Doran said log data indicates two of the three oil columns appear to extend beyond the presently mapped structural closure.
If confirmed, the implications of this apparent extension could be “quite significant”, he said.
Other partners in the Australian joint venture include Horizon Oil, which holds a 30% stake, Petsec Energy (25%) and First Australian Resources (5%).
Petsec company secretary Craig Jones told EnergyReview.net the discovery was a “very exciting opportunity” for the company.
“We’ve had a presence in China for some time now and up until now it’s been a small part of our business, and one that’s been discounted by shareholders,” he said.
“So it’s good to see value being delivered from our assets and we’re looking forward to taking the next step with the joint venture to appraise the discovery.”
Jones added that the Beibu block complemented the company’s existing Gulf of Mexico portfolio of assets.
“It shares certain similarities with our Gulf of Mexico blocks, such as being offshore in shallow water – so it’s a manner of operation we know very well,” he said.
Sharing Petsec’s excitement was FAR executive chairman Michael Evans.
“This is the biggest discovery FAR has ever been involved in,” he said.
“We’ve got a very active program this year and are participating in drilling 18 wells – most of which are designed to achieve quick turnaround.
“There will be a longer lead time on the Chinese well. However, it’s going to be a much higher-impact discovery than what we’re used to.”
Not surprisingly, news of the discovery sent the share prices of the companies soaring on the ASX last week. Horizon recorded the biggest jump, closing up 68.6% for the week and 109.8% for the month.
Horizon managing director Brent Emmett was unavailable for comment when EnergyReview.net contacted the company this week.
China is not a new destination for the four firms, which formed a consortium in 2002. However, this is the result they have been waiting more than four years for.
Earlier drilling results proved disappointing, as the partners focused their exploration in the eastern part of the block. Back in 2004, the JV undertook a three-well drilling program that made a 25 million barrel oil discovery. However, there was a catch – the oil was too viscous and subsequently considered unsuitable for extraction and commercialisation.
“That was a very frustrating time for us,” Evans said.
Adding to these frustrations was the fact that the Wei-6-12S-1 well was only days away from spudding last October, when the rig missed its slot – delaying drilling until the end of last month.
But four years of patience appears to have been a virtue for the companies, which will now turn their attention to appraising and eventually, they hope, commercialising their discovery.
