Save Article Instructions
Close 

Sarawak pinnacle reef gas discovery sets Newfield mark

Newfield Exploration Co., which is exploring strategic alternatives for its assets offshore Malaysia and China, has gauged gas at a second pinnacle reef discovery on Block SK 310 offshore Sarawak, Malaysia, and estimates initial gas in place at 1.5 to 3 tcf, the largest conventional exploratory success in the company’s 25-year history.

A drillstem test of the company’s B-14 well, which encountered 1,585 ft of net gas pay among an 1,800-ft gross column in the main carbonate objective, confirmed its commerciality. Newfield, which said it has identified dozens of reef prospects with multi-tcf potential along trend and near gas pipelines, will resume drilling in the 2013 third quarter at the B-17 prospect.

The B-14 well is in 250 ft of water 50 miles offshore Sarawak. It is less than 3 miles from the company’s first pinnacle reef discovery in a similar water depth at which Newfield has declared recoverable reserves of 265 bcf. A joint development is planned.

Recent amendments to gas terms in Malaysia make natural gas developments economically competitive with oil developments, the company said. The company signed a production sharing contract for Block SK 408 and completed farming into Block SK 319 in December 2012 covering a combined 1.7 million acres and nearly doubling Newfield’s position offshore Malaysia.

Newfield operates 1.1 million acre Block 310 with a 30% interest. Mitsubishi Corp.’s Diamond Energy Sarawak subsidiary has 30%, and Petronas Carigali has 40%.

Block 408 covers 1.1 million acres in 200-400 ft of water and has 16 discoveries with existing infrastructure and production hubs located less than 10 miles from dozens of potential prospects identified to date. The company has a 10-well commitment over a 3-year initial exploration period. Newfield will operate with a 40% interest, and Shell and Petronas Carigali have 30% each.

Block 319 covers 580,000 acres in 300 ft of water or less adjacent to Block 408. Newfield has identified several exploratory prospects and has a five-well commitment over an initial 3-year exploration period. Shell operates Block 319 with 50% interest, and Newfield and Petronas Carigali have 25% each.

Goldman, Sachs & Co. is leading Newfield’s strategic alternatives search and is expected to open a data room in the second quarter of 2013.


To access this Article, go to:
http://www.ogj.com/content/ogj/en/articles/2013/04/sarawak-pinnacle-reef-gas-discovery-sets-newfield-mark.html