Managing director Dr Raymond Shaw told EnergyReview.net that completion of the latest farm outs had given Great Artesian a high level of exploration and a high equity position of between 30% and 50% for very little outlay.
The latest success in the multi-pronged exploration assault on its prime 1010 square kilometre PEL 106 in South Australia, Paprika-1, has now been classified as a gas-condensate discovery and is being cased and suspended as a potential future producer.
Shaw said it was disappointing that the company was unable to flow Paprika-1 because of problems with the test tools, but drilling had shown at least two zones “with strong hydrocarbon indications”. Further cased-hole testing would be conducted in the coming months.
Paprika-1 tested an anticlinal structure 13km southwest of the new Cadenza-1 gas discovery, 7.5km northwest of the new Rossco-1 gas discovery and 7.4km north of the Smegsy field.
Fully funded by farminees Energy Investments and Enterprise Energy, the Great Artesian-operated well is the fourth drilled in PEL 106 this year.
All previous wells – Udacha-1, Middleton-1 and Cadenza-1 – have been cased and suspended as new field gas discoveries and potential future gas-condensate producers from the Patchawarra Formation.
Another Great Artesian-operated well, Rossco-1, was drilled late last year northeast of successful Smegsy-1 and Middleston-1, and has flowed about 4.2 million cubic feet per day of gas, with 100-150 barrels a day of associated condensate.
Cadenza-1 has flowed at 1.5MMcf/d, pointing to a 12 billion cubic feet gas field.
Shaw said testing of Rossco-1 would continue this month to ascertain stabilised pressure flows and productivity of the sandstone.
Rossco-1 participants are Great Artesian (50%), Energy Investments (37.5%) and Enterprise Energy (12.5%), conditional on a commercial discovery.
Success for Great Artesian and its partners is acting as a dynamic catalyst to accelerated exploration in the region.
The Rossco rig has been moved to Middleton to drill a well under Beach Petroleum’s operatorship in late July and then another at Udacha in August.
And that is the way Great Artesian is playing the exploration game, with more such discoveries expected to see more “no discovery, no earn” farm outs announced in the coming months.
Great Artesian’s other Cooper Basin farminees include Magellan Petroleum, along with a couple of newcomers in Canadian-backed Red Sky Energy and recently listed fellow Sydneysider Rawson Resources.
Discussions with other potential farm-in partners are continuing.
Great Artesian’s farm-out strategy will see it participate in eight exploration wells and one appraisal well this year.
Shaw said farminee expenditure for the year would be around $24 million, for which the company would be free-carried for over $10 million, about the same as expected in 2007.
