The Warro Gas Field was discovered in 1977 by WAPET. The field has since been assessed as having a gas resource of 4-7 trillion cubic feet in place. But with the gas being in tight sandstone reservoirs at a depth of about 4000m, the discovery was until recently considered uneconomic.

But Latent says recent advances in drilling and completion technology combined with higher domestic gas prices have changed this outlook, and the company aims to drill the field in September this year.

Near the town of Moorra and only 30km to the east of the Parmelia and Dampier-Bunbury gas pipelines, Warro is contains high quality gas suitable for domestic supply. According to Latent, the field is expected to provide a substantial, secure and long-term supply of gas to Western Australia soon after development approval is granted.

Managing director Stephen Keenihan said depending on the outcome of the drilling program, Warro could be in production by early 2009 at an initial rate of 20 million cubic feet of gas a day climbing to 100MMcf a day.

Latent has secured two drilling slots on a new 1500hp National “Ideal” rig capable of drilling beyond 5000m. The rig has been purchased by Fortune Drilling, a subsidiary of Perth-based IPS Australasia, which will be providing drilling solutions to the Australian onshore drilling industry.

Currently under construction, the rig is scheduled to arrive in WA mid year and start operations at the Warro Gas Field during September 2008.

Latent Petroleum plans to drill the two wells in 2008 and carry out well testing operations to determine the optimum means to extract gas from the Warro Gas Field.

Latent chairman Charles Morgan said the Warro field fitted the State Government’s recently announced support for the development of tight gas in WA.

“Events in recent days have highlighted the importance of an expanded range of sources for domestic supply,” Morgan said.

“Warro will provide the South-West with an alternative and new supply of gas to keep up with the increasing demand for energy for the domestic market.”

Latent maintains that fracture stimulations conducted on Warro-1 and Warro-2 in the 1970s were not effective at the temperature and pressure encountered at these depths.

“It has been shown that the fluids used during drilling and stimulation actually had a detrimental impact on the reservoirs production performance,” the company said.

“Petrographic and clay mineralogy studies by CoreLab in 1999 indicate that the Warro sandstones are susceptible to formation damage by water based drilling fluids, and that the stimulation treatment used in Warro-2 failed due to the use of water based transport fluids and inadequate proppants.”

In the 30 years since these two wells were drilled and tested there have been significant advances in drilling and stimulation technology and the understanding of reservoir properties. Through the development of under-balanced drilling techniques and advances in fluid technology, tight gas plays now have the potential to be commercially viable, according to Latent.

Latent says that an analogous US gas field, Jonah in southwest Wyoming, was also discovered in the early 1970s and subjected to fraccing treatments that were damaging to the formation, leading to the conclusion that it was uncommercial.

“It was not until the mid 1990s that the field was re-entered, and with modern completion techniques Jonah was established as one of the most prolific gas fields in North America,” Latent said.

“It presently produces 680 million cubic feet per day from 2400 wells with total estimated recovery of greater than 14 trillion cubic feet.”

The Warro-1 and 2 wells have several significant similarities to the Jonah Field, according to Latent.

“In fact, some characteristics in the Warro Field that are considered superior to those found at the Jonah Field.”

Schlumberger was commissioned to undertake a reservoir characterisation and stimulation evaluation of Warro in September 2007.

This reservoir simulation work indicated that if the Warro wells are successfully stimulated by hydraulic fracturing using the appropriate frac fluids and proppant, about 50% of the fields 4-7Tcf of gas was likely to be recoverable.

Latent owns 100% of the Warro Field and this project is its sole focus.