Partners in Flour Bluff include three Austalian companies – Sun Resources NL, Victoria Petroleum NL and Tony Barlow Limited, each with a 12.5% stake.

“Success here will prove the concept that major gas reserves of up to 227 billion cubic feet are sitting under this western part of the currently producing shallow gas field,” Victoria Petroleum managing director John Kopcheff said.

“Total potential gas reserves of up to 300 billion cubic feet of gas in all categories are considered possible for the whole field based on the operator’s mapping. This is a very significant amount of gas to prove up in a hungry energy market like the US that is paying gas producers four times the price that gas producers receive in Australia.”

The Flour Bluff gas project, located adjacent to Corpus Christi, covers about 10,200 acres of both onshore and offshore production units within a larger area of mutual interest.

The initial development project program calls for a minimum three-well exploration drilling program targeting multiple sand reservoirs as well as field development activity of a recompletion and work-over program on four wells between February and June.

BG Webb-1 is the first well in the exploration and development program aiming to significantly increase production and to enlarge the current Flour Bluff Gas Field 92.5 bcf (billion cubic feet) Proved, Probable, Possible reserve base to an estimated potential 300 bcf from multiple gas bearing sands between 1,980 and 3,500 metres in the large regional structure underlying the Flour Bluff gas field leasehold lands.

BG Webb-1 is specifically targeting up to 20 bcf of recoverable gas in the combined “J” and “K” sands. Adjacent wells have shown these sands are gas-bearing, Kopcheff said.

Reservoir quality is generally low, so fracture stimulation is required to achieve commercial production.

The operator, Texas Crude Energy Inc, has carried out three successful test reservoir stimulations on three old wells in the Flour Bluff Field two years ago, increasing the gas production rate from 1.3 MMCFD to 7 MMCFD (million cubic feet per day). The wells continue to produce two years after stimulation, according to Victoria Petroleum.

BG Webb-1 is planned to reach a total depth of 3,810 metres in about 25 days.

If the well is successful, then it is reasonable to anticipate that the whole of the western portion of the Flour Bluff Gas Field can be developed in this way, Kopc heff said.

“If fully successful this would allow the development of up to an additional 160BCF of gas from the western portion of the Flour Bluff Field which has a present proved, probable and possible recoverable gas reserve of 67 BCF for a combined recoverable reserve of up to 227 BCF of gas,” he said.

“The acquisition of the interest in the Flour Bluff Gas Project is a continuing part of Victoria Petroleum’s strategy to build up low risk oil and gas development projects in the energy- hungry US oil and gas market. Flour Bluff joins the Eagle Oil Development Project in California as a potentially very significant US project for Victoria Petroleum NL in 2005.”

Partners in Flour Bluff include: Texas Crude Energy Inc (operator) 37.5%, Sun Resources NL 12.5%, Victoria Petroleum NL 12.5%, Tony Barlow Limited 12.5%, King Ranch Energy Inc 12.5% and Davis Gulf Coast Inc 12.5%.