Based on initial studies that incorporate the Fossetmaker-1 results, Nexus has assessed that the Echuca Shoals structure, in Browse Basin permit WA-377-P, could contain up to 4 trillion cubic feet of gas in-place and associated condensate.
But it said another well would be required to test this potential.
“There are positive implications from this appraisal well result indicating a significant prize may exist at Echuca Shoals,” Nexus managing director Ian Tchacos said.
“It is unfortunate that the Fossetmaker-1 well did not provide a more definitive result, however we have confirmed the presence of sand continuity and potential of a deeper gas column from a very significant step out from the Echuca Shoals-1 discovery well.
“Our studies indicate that substantial gas and liquid volumes may be present at Echuca Shoals warranting the ongoing appraisal of a potentially large accumulation in a rapidly emerging LNG province.”
Fossetmaker-1 is 7km east-northeast of the Echuca Shoals-1 discovery well and was drilled by operator Shell Development last month to evaluate the possible eastern extension of the Echuca Shoals field.
The appraisal well was drilled at a location interpreted to be structurally deeper than the discovery well to test the potential for a deeper gas contact accumulation.
But Fossetmaker-1 intersected the top reservoir section deeper than expected, meaning gas shows were encountered in poor quality reservoir sands over a 10-metre interval at the top of a larger sand package.
This indicates a possible gas-water contact at a depth of 3671m subsea, some 15m deeper than the deepest gas seen in Echuca Shoals-1, Nexus said.
Better quality sands were intersected in the Fossetmaker-1 well over a 100m interval below the gas zone.
Although these sands were poor quality, Nexus said the Echuca Shoals-1 discovery well indicated such sands could improve in reservoir quality when they are intersected above the gas water contact.
Nexus said wireline formation pressure measurement logs run in the well were unable to record valid pressure points in the Tithonian sands at the Fossetmaker-1 location.
As a result, it said the JV was unable to confirm whether the gas encountered in Fossetmaker-1 was in pressure communication with the gas observed in the Echuca Shoals-1 well and if this defined a new common gas-water contact across the whole field.
In other news, Nexus has received A$75 million from Osaka Gas in payment for the sale of a 15% interest in the Crux liquids project, implying a total value for the project of A$500 million.
Nexus finalised a sale and purchase agreement with Osaka Gas which was executed on August 1.
Nexus and Osaka Gas will now initiate joint studies to identify and secure exploration opportunities that will target significant potential gas resources.
“Nexus is now aggressively pursuing the development of the Crux liquids project following the completion of front-end engineering studies and the drilling of the Crux-2 and Crux-2 ST1 appraisal wells,” the company said.
Nexus and Osaka Gas have committed to a work program intended to progress the Crux liquids project to a financial investment decision in the second quarter of 2008.
