Ausam's wholly-owned subsidiary, Ausam Resources Ltd (ARL) has signed the PL 71 farmin agreement with Origin Energy and Santos.
This gives ARL the opportunity to earn up to a 30% interest in Surat Basin production licence PL 71, which contains the producing Parknook and Namarah fields. ARL will earn its full 30% interest through spending about $5 million. PL71 is operated by Origin and is a 6000 hectare permit.
The company plans to drill up to five development wells in PL 71 during 2005. These proposed wells within one to three kilometres from the nearest gathering system, linking production to processing facilities, pipeline, and market. The first two wells of the proposed 11 well PL 71 development program are Namarah-7 and Parknook-7.
Origin, Ausam's joint venture partner in and operator of PL 71 and ATP 470P, which surrounds PL 71, has contracted Century Drilling’s rig 7 to start drilling the Namarah-7 and Parknook-7 gas development wells in PL 71 during March 2005.
“The rig will be on location in early-March and the Century-7 rig will conventionally drill the up-hole sections of the Namarah-7 and then the Parknook-7 gas development wells,” Ausam said.
“A coiled tubing unit will subsequently be used to drill under-balanced into the Triassic Showgrounds and Rewan reservoirs of the PL 71 development wells.”
Drilling to the proposed up-hole depth of 2,200 meters is expected to take about 10 days and results from the wells are expected by the end of May 2005, the company said.
Ausam will fund 100% of the wells and will own an initial 20% interest in the permit.
The partners plan to drill two to three additional PL 71 development wells before the end of the year.
In the surrounding area of ATP 470P, the Kyeen Creek-1 well will be drilled late this year to evaluate the potential for liquids-rich gas in the Permian upper Tinowon sandstones formations, Ausam said.
“A coiled tubing unit may be used to drill underbalanced into the upper Tinowon reservoir of the well, with the Triassic Showgrounds and Rewan reservoirs being secondary objectives,” the company said.
“Recent drilling of the upper and lower Tinowon formations in the area has revealed over-pressured gas bearing reservoirs. Ausam will fund 100% of the well and will own 45% interest in the permit.”
ATP 470P is an 34,000 hectare permit containing the Kyeen Creek prospect and Formosa Downs lead. Drilling locations in the Kyeen Creek prospect are within six kilometers of Origin's PL 71 gathering systems, which link current production to processing facilities, pipelines, and market.
“Due to the competition for equipment and new health, safety and environmental requirements instigated under the 1 January 2005 revised Queensland Petroleum Act, each completed PL 71 development well is estimated to cost $2.1 million,” Ausam said
Ausam and Origin also aim to acquire about 230km of new seismic, starting from late 2005, in order to high grade certain prospects and play types as well as contribute to the regional evaluation of the 1.5 million acre ATP 754P permit.
Ausam also announced the appointment of Edward Surka as its manager, exploration - Australia. Surka will be based in the company's Brisbane offices and will be responsible for Ausam's exploration activities in Australia.
He has more than 25 years of management, exploration, and development experience in Australia and South East Asia. Surka is a geologist who has held senior management positions with Santos Asia Pacific Pty Ltd and MIM Petroleum Exploration Pty Ltd.
Ausam, through its Australian subsidiary ARL, is engaged in oil and natural gas development and exploration in onshore permits in Queensland, Victoria and Western Australia. It has interests in 15 prospects and 10 leads in these permits.
