Austral chief executive Thom Jewell told PetroleumNews.net from Wellington this morning that the Ensign Rig 19 reached the target depth of about 1930m last night and that logging crews would probably test the well in the next day or two, with initial results available early next week.
Cheal-A6 was directionally drilled from a surface location adjacent to the Cheal production facility and drilled through a secondary reservoir, the Miocene-aged Urenui sands, before hitting the primary target, the Miocene-aged Mount Messenger formation. It is understood that Cheal-A6 is targeting a new oil pool.
Cheal-A6 is the first of two wells that could double oil production at the field to about 1000 barrels per day. The second well, Cheal-A7, will be drilled straight afterwards.
Jewell has previously said that if Cheal-A6 is successful, it is modelled to add 320,000 barrels of recoverable oil to the field's reserve and 250-350 barrels per day to its current production rate of about 500bpd.
Austral operates Cheal with a 69.5% interest, while TAG Oil holds the remaining 30.5%.
In addition, Jewell told PNN that Austral was progressing plans to drill the nearby Kahili-2 appraisal well within the next three months, probably using slimhole technology that would reduce drilling costs without compromising site safety.
Kahili-2 will be drilled from the same wellsite as the discovery Kahili-1A/B well but deviated higher and about 100m northeast to target the redefined crest of the Kahili structure.
Production at Kahili-1A/B ceased in November 2004, though any commercial production from new wells can be achieved with minimal delay due to idle production facilities. Reserves to this property were written off in 2004.
Austral has an 85% operating interest in Kahili, while TAG holds 15%.
Jewell added that Austral has completed raising additional capital from North American investors, primarily to fund the company's drilling campaigns in Cheal and other nearby fields, as well as other working capital.
Austral had placed 11,222,360 common (ordinary) shares, with attached half-warrants, sold as units at $US0.50 per unit, for total proceeds of $US5,611,180 (about $A5,874,905).
Two half-warrants are exercisable for one common share of the company's capital for 15 months after closing at an exercise price of $US1.
