The venture will spud the Cowrie-1 wildcat in onshore South Australian permit PEL27 in early November.
Numerically the odds are very much against success. Only a handful of wells have encountered oil onshore or offshore Otway since exploration began in the basin in 1866 at Salt Creek in the coastal Coorong region, and only two of them have flowed oil to surface.
Undeterred, operator Beach and its joint venture partners rate the chances for success at Cowrie as good. Essential has even bullishly talked of an upside as high as 4 million barrels.
The group is concentrating on the Penola Trough, a northwest-southeast trending feature within the main Otway Basin, most of it in South Australia where the previous oil finds have been made. In particular the group is drawing on data from Origin’s Killanoola-1 discovery, 6km to the northeast.
Drilled in late 1997, Killanoola initially flowed oil to surface unaided at around 300 barrels a day. It was then put on pump at a rate of 100 barrels a day before the recovery fell to 25 barrels a day whereupon Origin abandoned the effort as uneconomic.
A postmortem showed that the Sawpit Sandstone reservoir (a unit in the Lower Cretaceous Pretty Hill Formation) was thin and could not sustain a commercial flow. But the find confirmed earlier theories that the best chance for oil in the Penola Trough was along its northern margin.
Origin’s Wynn-1 drilled in 1994 was the first well to flow oil in the Otway Basin. Sawpit-1, also in the early 1990s, encountered a heavy crude over a 32m interval at its base. Both lie towards the northern edge of the trough.
Other discoveries in the Penola Trough indicate a gradation from gas in the centre to liquids in the north. The dry gas discoveries at Katnook, Haselgrove and Ladbrook Grove fields are in the trough’s centre.
A few kilometres to the north is a wet gas zone where Origin’s Jacaranda Ridge-1, drilled in 1999, flowed condensate at just over 400 barrels a day in association with 800,000 cubic feet of gas. The oil at Wynn, Sawpit and Killanoola has been trapped as it migrated further north out to the shallower tough margins.
The Cowrie structure is on a separate, but similar, fault block to Killanoola where pre-drill studies indicate the target Sawpit reservoir is thicker than the earlier discovery and has a good seal. It is also about 20km northwest and updip from Jacaranda Ridge in adjoining permit PEL32.
Beach has scheduled a 12-15 day, 1350m well and expects to enter the reservoir zone at a depth of around 1200m.
Cowrie-1 is about 27km northwest of the South Australian border town of Penola. But all infrastructure in the region is centred around the gas fields, so any oil would probably have to be taken by road 450km east to the nearest refinery, which is Shell’s Geelong plant, or perhaps on to the ExxonMobil facilities at Altona just outside Melbourne.
Beach has a 30% interest in PEL27 while Origin Energy has 50% and Essential Petroleum the remaining 20%.
