Rick Wilkinson
OGJ Correspondent
MELBOURNE, July 12 -- Arc Energy Ltd., Perth, will use a $40 million (Aus.) gas sales prepayment from aluminium producer Alcoa Australia to accelerate its exploration program in Western Australia's Canning basin.
The program, to begin in August and run for 3 years, includes up to 20 exploration wells, at least four of which are earmarked to fulfil the Alcoa gas obligation for up to 500 petajoules of gas.
Arc also is applying to construct what has been dubbed "the Great Northern Pipeline" to extend from the region east of Broome southward into the Pilbara area east of Port Hedland. The company has begun ground surveys and discussions with traditional owners along the planned route.
The deal with Alcoa makes bankable the development of any Canning basin gas discoveries and the building of the pipeline, Arc says, because Alcoa has the financial credibility, contract flexibility, and long-term gas requirements to be a Canning development partner of choice.
Arc has secured tenure and operatorship over a majority of the permits in the northern and western sectors of the basin.
Its first wells will be Valentine-1/Stokes Bay-1.
The two prospects will be drilled from the same pad. The first probe will be the deep Valentine structure which is large enough to be viable as an oil or gas find if filled to spill point.
The plan is then to come back up the hole and sidetrack to the north into the Stokes Bay prospect which, in effect, is a 2 km stepout from the earlier Point Torment gas find.
