Exploration/Development Briefs

July 30, 2012

Argentina

Americas Petrogas Inc., Calgary, has set production casing at a vertical exploratory well on the Totoral block in Argentina's southern Neuquen basin and plans to test the Vaca Muerta shale and possibly other formations.

The company acquired a full log suite at La Hoya.x-1 and set casing to 6,463 ft. The well penetrated 666 ft of the primary target Vaca Muerta formation with oil and gas shows through the whole shale column. Hydrocarbon shows were also encountered and data acquired in the Mulichinco formation, 299 ft thick, Quintuco 2,172 ft thick, and Quebrada del Sapo 190 ft thick.

Americas Petrogas operates the 264,240 net acre Totoral block with 90% working interest. Totoral is adjacent to the 311,310-acre Yerba Buena and 438,390-acre Bajada Colorada blocks, both company operated. Gas y Petroleo del Neuquen holds 10% interest in the three blocks.

Australia

PetroFrontier Corp. plans to conduct a 10-stage frac in the Lower Arthur Creek "hot shale" at each of its three wells in a joint venture with Statoil Australia Oil & Gas AS in the southern Georgina basin in Australia's Northern Territory.

Calgary-based PetroFrontier has spudded Owen-3, third of the three wells, that is projected to 1,280 m as a high-angle pilot hole in the eastern part of EP 104. Statoil is crediting PetroFrontier with exploration expenditures previously incurred in 2012 and will contribute 50% of the costs associated with the project.

Owen-3 will be drilled through the Lower Arthur Creek "hot shale" and into the Thorntonian carbonate. PetroFrontier will core the Lower Arthur Creek and then log the well. The core will provide information to enhance PetroFrontier's understanding of formation lithology that will aid in optimizing the frac design and reservoir modeling.

Owen-3 will be plugged back a short distance and then deviated horizontally for about 1,000 m into the primary target zone. Drilling of Owen-3 is expected to take 4-5 weeks.

After drilling Owen-3H, PetroFrontier intends to conduct a 10-stage fracture stimulation program at each of its three wells in the following order: MacIntyre-2H, Baldwin-2Hst1, and Owen-3H. In order to maximize operational efficiencies, the wells will then be flow tested in the reverse order.

Brazil

Ecopetrol of Colombia said its Brazilian subsidiary will acquire a 30% interest in three Santos basin exploration blocks offshore Brazil from PanAtlantic Energy Group, formerly Vanco Overseas Energy Group, Houston.

Ecopetrol's acquisition of the interest in the BM-S-72, BM-S-63, and BM-S-71 blocks, formerly SM-1100, SM-1036, and SM-1035, respectively, is subject to ANP approval.

PanAtlantic through its Brazilian subsidiary will retain a 40% working interest in the concessions and continue as operator for a three-well drilling campaign that started July 7 with the spud of the Sabia-1X well on BM-S-72. The other participants are Panoro Energy ASA 15% and Brasoil Round 9 Exploracao Petrolifera Ltda. 15%.

Ecopetrol established the subsidiary Ecopetrol Oleo e Gas do Brasil Ltda. in 2006. The new Santos basin blocks will add to the company's Brazil portfolio that includes participation in offshore exploration activities on eight blocks in the Para-Maranhao, Campos, and Santos basins.

Total SA has become operator of the deepwater Xerelete concession in the Campos basin offshore Brazil, where the Xerelete heavy oil discovery was drilled in 2001.

Transfer of Xerelete operatorship to Total from Petrobras was unanimous among the partners. Block interests are Total and Petrobras 41.2% and BP 17.6%.

Xerelete, in 2,400 m of water 250 km east-southeast of Rio de Janeiro, contains 17-20° gravity oil. A presalt prospect has also been identified below the Xerelete structure, which lies 40 km west of the Pao de Acucar discovery. Total plans to start drilling activities in 2013.

Total also holds a 20% interest in Block BM-S-54, where the Gato do Mato discovery is being appraised.

Chad

ERHC Energy Inc., Houston, said the Republic of Chad has issued it an exclusive exploration authorization for the Chari-Ouest III, BDS 2008, and Manga blocks in southern Chad covered by ERHC's production sharing contract.

The initial term of the EEA is for 5 years, and it can be renewed for 3 more years. ERHC intends to identify leads and prospect and then drill as soon as circumstances allow.

Initial work will be on BDS 2008 and Chari-Ouest III. ERHC has 100% interest in BDS 2008 and 100% interest in half of Chari-Ouest III. Its holdings in the two blocks, on the north flank of the Doba and Doseo basins, total 5.155 million acres.

Martin Wensrich, ERHC geoscientist and technical advisor, said, "Our analysis of gravity, magnetic and 2D seismic data shows that ERHC's Chari-Ouest III and BDS 2008 blocks fall within the prolific Doba/Doseo Basin. Our main area of focus extends 260 km and is on trend and east of the 2011 Benoy-1 discovery by Overseas Petroleum Investment Corp. and north of discoveries by Esso."

ERHC has invited eligible contractors to submit expressions of interest in providing environmental impact assessment, gravity-magnetics, and seismic acquisition services in the area.

The OPIC Benoy-1 well drilled a low side fault closure and test flowed oil at a calculated rate of more than 2,000 b/d from lower Cretaceous fluvial/deltaic sands, ERHC said. Esso's Tega-1 encountered hydrocarbon reserves with an estimated potential of 8 million bbl of oil equivalent in the Lower Cretaceous C sand. The Esso Maku-1 drilled a Lower Cretaceous faulted structure and encountered hydrocarbons with an estimated potential of 21 million boe.

French Guiana

Shell France has spudded the GM-ES-2 delineation well on the Guyane Maritime permit off French Guiana.

The well follows the late-2011 Zaedyus oil discovery in 2,048 m of water, which discovered 72 m of net oil pay in two turbidite sand systems likened to the Jubilee field play across the Atlantic offshore Ghana (OGJ Online, Sept. 9, 2011).

Shell is operator of GM-ES-2 with 45% interest. Tullow Oil PLC has 27.5%, Total SA 25%, and Northpet Investments 2.5%.

Guyana

Repsol Exploracion SA will plug and abandon the Jaguar-1 exploratory well off Guyana before reaching the primary objective at 6,500 ft.

The partners unanimously agreed to cease drilling at the present depth of 4,876 m for safety reasons as the well had reached a point where pressure design limits prevented further drilling to the main objective.

Jaguar-1 is a high-pressure, high-temperature well spudded in February using the Atwood Beacon jack up. While the primary Late Cretaceous objective was not reached, samples of light oil were successfully recovered from two Late Cretaceous turbidite sands above the primary objective.

At 6,500 m Jaguar-1 would have become the deepest well in the Guyana Suriname basin (OGJ Online, Feb. 9, 2012).

Repsol is operator with 15% interest in the Georgetown Petroleum Prospecting License. Others in the group are YPF Guyana Ltd. and Tullow Oil PLC with 30% each and a unit of CGX Energy Inc., Toronto, 25%.

Malaysia

Lundin Malaysia BV has spudded the first of a five-well 2012 exploratory program on the SB307 and 307 blocks in Malaysian waters offshore Sabah.

The vertical Tiga Papan-5 well is to go to 1,671 m subsea in 50 m of water and targets mid-Miocene aged sands of the Tiga Papan Unit previously tested in a 1982 discovery well that flowed a combined 5,631 b/d of oil.

The well is in an unappraised fault block east of the Tiga Papan-1 discovery well. If encouraging the new well will be sidetracked into discovery well fault block to test the downdip extension of the pay zones encountered there.

Lundin Malaysia holds 42.5% interest in the two blocks. Partners are Petronas Carigali Sdn. Bhd. and Nio Petroleum Sabah (Ltd.).

Lundin Malaysia operates the PM308A, PM308B, SB303, SB307, and SB308 off Malaysia.

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