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AWE Strikes Huge Gas Discovery in Australia's Perth Basin

Share Print Bookmark    |    Tuesday,September 02,2014

AWE Limited, as Operator of Permits L1/L2 in the Perth Basin, Western Australia, reported the Senecio-3 appraisal well was at Total Depth (TD) of 11,056 feet (3,370 meters) and data collection from the primary target and underlying formations has been completed. Operations are now preparing to run 5.5 inch casing prior to suspending the well.

As previously reported, the primary target Dongara/Wagina formation was intersected from 8,645 feet (2,635 meters) to 9,051 feet (2,759 meters) on prognosis. Elevated gas shows were observed and the Senecio-3 well was deepened to 11,056 feet (3,370 meters) to appraise secondary targets. Multiple hydrocarbon bearing formations have been encountered and results of the initial evaluation of well data are summarized below.

Upside in Dongara/Wagina Reservoir

Data from the primary target Dongara/Wagina tight sand reservoir indicates better porosity and permeability than the Senecio-2 well. Interpretation of the wireline log data indicates the section down to at least 8,759 feet (2,670 meters) is gas saturated with evidence of moderate to good quality reservoir. Contingent Resources are estimated to be from 40 to 130 billion cubic feet (Bcf) of gas gross, based on the well data and existing 3D seismic. The best estimate 2C Contingent Resource has been revised upwards to 70 Bcf gross.

Signficant New Gas Play Discovered

Wireline logs and pressure tests have identified a significant gas discovery in the deeper sands below the primary target, which has the potential to contain a substantially larger volume than the gas accumulation in the Dongara/Wagina. Senecio-3 intersected the Carynginia Shale from 9,051 feet (2,759 meters) to 9,511 feet (2,899 meters), the Irwin River Coal Measures from 9,511 feet (2,899 meters) to 10,344 feet (3,153 meters), the Kingia Sandstone from 10,344 feet (3,153 meters) to 10,472 feet (3,192 meters), and the High Cliff Sandstone from 10,472 feet (3,192 meters) to 10,935 feet (3,333 meters) before reaching a total depth of 11,056 feet (3,370 meters) in the Holmwood Shale.

All formations had elevated gas shows and several moderate to good reservoir quality sandstone intervals were encountered in the Kingia and High Cliff Sandstone formations. Wireline pressure data have subsequently confirmed a gas gradient over the two sandstone intervals. The Kingia/High Cliff Sandstone results indicate the discovery of a significant new gas field which the joint venture plans to appraise on a high priority basis. Additional analysis is required before estimating Contingent Resources for this discovery.

Bruce Clement, AWE’s Managing Director, said: "This is a very exciting discovery that adds considerable momentum to the near-term development potential of the Senecio gas field and other nearby prospects in the north Perth Basin.

"The positive appraisal of the Dongara/Wagina reservoir and the discovery of a potentially larger new gas play in the deeper sands have increased the likelihood of commercial development of the Senecio gas field, particularly given the proximity to existing infrastructure.

"Gas production from the Senecio field with a low cost tie in to the AWE-operated Dongara Gas Plant, 4.3 miles (7 kilometers) to the west, would be a logical first step in commercializing unconventional gas in the onshore Perth Basin and would reinvigorate the gas industry in the Mid West of Western Australia.

"This discovery has materially upgraded the potential of other prospects in the area and the joint venture plans to drill the Irwin-1 exploration well to the east of Senecio later this year, targeting the same plays.

"We are prioritizing the evaluation of the new gas discovery at Senecio and AWE is also evaluating the potential for a conventional flow test of Senecio-3 later in 2014."

Core samples and log data from the Dongara/Wagina reservoir will be fully analysed and evaluated prior to making a decision on field development. AWE will not conduct hydraulic fracture stimulation on Senecio-3 at this stage. The Senecio-3 well could be completed as a production well in a future field development.

The Senecio-3 appraisal well is located on agricultural land approximately 9 miles (14.5 kilometers) east of Dongara, Western Australia, and 4.3 miles (7 kilometers) from the AWE-operated Dongara gas plant.

The Joint Venture partners in L1/L2 are:

• AWE Limited (via subsidiaries) (Operator) - 50.0 percent
• Origin Energy Resources Limited - 50.0 percent