S. Australia exploration program to target oil

Sept. 8, 2006
Adelaide Energy Pty. Ltd. plans to drill as many as four onshore wells over the next 5 years targeting oil in southeast South Australia.

By OGJ editors
HOUSTON, Sept. 8 -- Adelaide Energy Pty. Ltd. plans to drill as many as four onshore wells over the next 5 years targeting oil in southeast South Australia.

The $13 million exploration program follows the company's recent award of Petroleum Exploration License (PEL) 255, which includes Block OT2006-A in the Otway basin.

The block's two-stage work program involves $7.3 million of guaranteed requirements, including 3D seismic acquisition, an aeromagnetic survey, the drilling of two wells, along with geoscientific studies in the first 2 years. The nonguaranteed portion of the program includes two additional exploration wells and geoscientific studies.

The first appraisal well is to spud by March 2007.

Adelaide Energy Director Carl Dorsch said PEL 255 covers the Jacaranda Ridge oil discovery that initially flowed at 420 b/d of oil on a 1999 drillstem test but at that time was deemed uneconomic.

"Reinterpretation of petroleum drilling and seismic data by Primary Industries & Resources SA has revealed the prospect has significant potential and would benefit from advanced drilling and production technologies currently available to define new leads," Dorsch said.

He said, "Gas and oil discoveries in South Australia during the past 20 years, coupled by recent exploration successes in the Victorian sector of the onshore Otway basin, support an optimistic view of the resource potential of this area."

Dorsch added, "The majority of discoveries in Otway basin have been gas. In fact, current production is restricted to Katnook gas field, which is relatively mature and produces gas and condensate, so new oil discoveries in the area will have the potential to attract renewed interest in oil exploration opportunities."

In 2005 Adelaide Energy secured one of the largest prospective Cooper basin gas acreage ever awarded and the last major petroleum block to be released under the South Australia government's 1998 initiative, which was created to attract more aggressive, independent oil and gas explorers into the Cooper basin.

The southwestern perimeter of Adelaide's Cooper basin tenements—the 1,600 sq km CO2005-A Block in the Nappamerri Trough—is just 25 km northeast of the Moomba gas processing plant. The holding covers one of the two primary source areas for gas for the wider Cooper basin blocks in South Australia. The gas in the area is held in tight sands, thus only seven wells have been drilled, most with old technology and seismic.

The company could drill its first Cooper basin well in late 2007, targeting potential oil accumulations in the overlying Eromanga sediments. Subsequent wells will test the basin's deeper gas formations to a TD of 3,500 m.