Austral told the NZX this morning that the Supplejack South-1 well – which has a surface location in licence PEP38741 but deviates into adjacent licence PEP 38765 – had reached its target depth of 1951m.
The main Miocene-aged target, the SN-0 Sandstone, was encountered at its predicted depth below 1900m and electric logs demonstrated there were one to two metres of oil pay at the top of a seven-metre thick reservoir sandstone.
Gas-charged sands were also encountered, with a gas sample being taken from one of these.
Fellow Supplejack partner Perth-based Tap Oil told the ASX that an MDT test had recovered an oil sample in good reservoir quality.
The joint venture had now decided to deviate the well 550m further south, where it was anticipated these reservoirs would be penetrated some 10m higher on the structure, with a view to intersecting a bigger oil column in the SN-0 Sand.
Tap said oil-water contact was apparent within the oil-bearing sand, so the sidetrack was planned to immediately delineate the oil updip of this location.
“Should the sidetrack well confirm hydrocarbons, there is potential for a further updip closure which may also be investigated,” Tap said.
Austral chief executive Dave Bennett said the Supplejack South-1A well deviation operation was already underway and should be completed between Christmas and New Year.
Meanwhile, operations had started today at the Cardiff-2A wellsite, in licence PEP 38738, to isolate the McKee Sands in order to flow test this gas pay without interference from other test zones.
Flow-testing of this zone was expected to start before the end of year and to continue through January.
Bennett said this test was intended to provide flow and pressure data to establish the long-term production potential of the McKee sands, the main producing Eocene-aged interval at Cardiff-2A.
Subsequent to this program, a workover rig would recomplete the well with a long-term production tubing assembly to allow the deeper and much thicker K3E sands to be isolated and independently tested.
It is now over a year since the original Cardiff well spudded, with several drilling and testing problems subsequently hindering operations at the site.
Bennett said that nearby in the same permit, the Cheal-A4 well – which had now produced more than 53,000 barrels of oil – would this week be shut-in to allow site reconstruction operations to start. This would lead to all wells on the Cheal-A site being brought back into long-term production in the second quarter of 2006.
The Cheal-B site was now being secured so the Cheal-B1 well could be drilled in February. This would be the first well to test the northern extent of the Cheal oil field.
It was anticipated several more wells would be drilled from Cheal-B, with pipelines laid during 2006 to link the two production sites to each other and to regional pipeline infrastructure.
The Supplejack South-1A sidetrack would result in the Heaphy-1 well (PEP 38746, operator Austral (66.7%)) spudding in February, rather than next month, followed by the Cheal-B1 well.
"Our active and well balanced program of work over the coming months has good potential to build value into the company, through new discovery and by realising value in our existing discoveries,” Bennett said.
The PEP38765 partners are: permit operator Tap Oil (50%), Austral Pacific Energy (36.67%) and TAG Oil (13.33%), though Austral is operating the Supplejack South well.
The PEP 38741 partners are: operator Austral Pacific Energy (30%), Tap Oil (50%) and TAG Oil (20%).
PEP 38738 shallow (Cheal) partners are: Austral Pacific Energy (operator 36.5%), Cheal Petroleum (30.5%), International Resource Management Corporation (33%).
PEP 38738 deep (Cardiff) partners are: Austral (operator 25.1%), Genesis Energy (40%), Cheal Petroleum (15.1%), IRMC (19.8%).
