While the company’s Browse Basin assets have attracted more attention than its onshore Gippsland activity, Karoon is very keen to boost its financial security by finding some onshore oil that can be quickly commercialised, exploration manager Mark Smith told PetroleumNews.net recently.
"We think that success in the coming onshore campaign – say confirmation of 2.5 million barrels of oil in each of the up-dip structures – would represent a net present value of around $75 million at prevailing oil prices," Smith said.
"We have done a good farm-out deal with ConocoPhillips in the Browse to carry us through much of the coming exploration program there. But Gippsland production, which could be brought on stream quite quickly, would give us additional protection and avoid cash depletion in the near term."
At the Megascolides-1 sidetrack, high gas readings were recorded with good oil fluorescence and oil staining seen over much of the recovered core sections.
“Core recovery was 85% with porosities up to 11% measured from core analysis,” Karoon said.
But permeability measurements were all very low, indicating very low potential for this formation to flow oil at this location. However, the good oil shows seen at this well suggested that significant – although unquantifiable – volumes or oil have been generated and migrated through this site, which is encouraging for exploration of any shallower nearby structures.
Karoon will now plug and abandon Megascolides-1ST.
This exploration program comprising the 2005 2D seismic and now the three-well drilling program follows up on the “very encouraging” oil shows seen in the 2004 Megascolides-1 well, according to Karoon.
“The mapping results show the Megascolides well to be positioned in a trough suggesting that if oil is trapped there, a stratigraphic trap of indeterminate size may be present,” the company said.
“Mapping also showed a number of shallower structural closures offering a range of attractive drilling targets.”
The next well, Megascolides-2, is 1.2km to the east and near the crest of the greater Megascolides structure. Its Rintouls Creek Formation target is more than 200m shallower than in the first well.
“The well is located within a closure and at these shallower depths porosity and permeability are expected to be improved offering an attractive target,” Karoon said.
“Initial economic screening has indicated minimum economic reserves threshold of 500,000 barrels. The Megascolides-2 structure has the potential to contain 2.5 million barrels of oil reserves.”
A third well, Raniformis-1, will test another structure 5km to the west.
Megascolides is named after a threatened species of giant Gippsland earthworm, growing up to a metre long. Raniformis is another vulnerable species; it also known as the Southern Bell Frog.
