Rick Wilkinson
OGJ Correspondent
MELBOURNE, May 1 -- China's Sinopec is negotiating a farmin to a Lakes Oil NI tight gas project in Victoria's onshore Gippsland basin and is sending a team from Bejing to visit the fields and evaluate field data.
Several US independents also have expressed interest in the project.
Lakes Oil, Melbourne, over the past 4 years has spent $30 million (Aus.) in drilling and fracturing in Wombat, Triffon, and Gangell fields within permit PEP 157. Using modern log interpretation provided by US-based tight gas experts, Lakes also has reassessed 1960s wells in the vicinity.
Based on the new interpretations, Lakes believes it has found a significant new onshore gas province in Victoria. The geological formation is the Cretaceous-age Strzelecki formation, which underlies the Tertiary-age Latrobe group of reservoirs that form the major reservoirs in the offshore sections of the basin in Bass Strait.
The Strzelecki, too deeply buried for commercial exploration offshore, is much closer to the surface in the onshore sector, and the Wombat, Triffon, and Gangell wells have shown gas and some free oil present throughout the formation, although permeabilities are poor.
Lakes expects commercial production can be achieved once an appropriate, comprehensive fracing program is designed.
Halliburton USA has completed an extensive area reservoir study that recommends moving to a second phase assessment to optimize requisite drilling and completion programs leading to production.
Lakes will apply for a retention lease over a large portion of the permit to allow time for concluding farmin negotiations.
