Exploration/Development Briefs

Sept. 10, 2012


Petromanas Energy Inc., Calgary, has sourced a shallow rig to drill the Juban prospect on Blocks A-B onshore Albania.

Following approval of the rig assignment by the government, the company would spud the well early in the 2012 fourth quarter and drill to 2,600 m.

Meanwhile, the Shpirag-2 well on Blocks 2-3 has surface casing set at 1,057 m and is drilling in intermediate hole at 2,200 m towards an expected total depth of 6,100 m.

Petromanas has completed the initial design of its seismic program on Blocks 2-3 and is working with its joint venture partner Shell to begin the program in the fourth quarter. The program is designed to further delineate the Shpirag prospect for appraisal drilling and improve data quality over other prospects and leads on the blocks. Shell will carry the first $20 million, and both parties will share any excess cost equally.

Petromansa management is finalizing options and plans for completing its 2012 PSC commitments on Blocks D-E.


CNOOC Galilee Gas Co. Pty. Ltd. has drilled the Scotty Creek-1 shale exploratory well on ATP 1005P in Queensland to 996.7 m and chip-sampled a 40-m section of the Early Cretaceous Toolebuc shale formation.

Shale samples will be subject to geochemical analysis. The data from this well forms part of the Galilee Joint Venture's assessment of the extent of maturity of the Toolebuc shale as an oil and gas resource.

The well was deepened to test for the presence of Jurassic Hutton and Adori sandstones as a potential oil play, but these sandstones were not present at this location (OGJ Online, Dec. 9, 2011).

CNOOC cased the well, suspended it as a potential water source for future drilling on the block, and released the rig to move to the Rocky Creek-1 shale core well in ATP 999P.

CNOOC Galilee is earning its participating interest in five blocks held by Exoma Energy Ltd., Brisbane, by providing the first $50 million of joint venture spending. Exoma has a 50% beneficial interest in both ATP 1005P and the Scotty Creek-1 well.


Queiroz Galvao Oleo e Gas reported the arrival in Brazil of the Amaralina Star ultradeepwater drillship, which is chartered to Petroleo Brasileiro SA under a 6-year contract with options to renew for 6 years.

The unit was built to drill as deep as 40,000 ft in as much as 10,000 ft of water and will be capable of operating in the Brazilian presalt area.

A sister vessel, the Laguna Star, is also under construction at the Samsung Heavy Industries shipyard in South Korea. It, too, is under contract to Petrobras.


Bulgarian authorities signed an exploration contract with Total SA covering the Khan Asparuh license in the Black Sea offshore Bulgaria.

Total said the license contains a number of oil and gas prospects. The company said Khan Asparuh represents the first time that this type of ultradeepwater abrupt margin play will have been explored outside Atlantic basins. Other such plays exist in French Guiana, Uruguay, Ivory Coast, and Mauritania, Total said.

The block, which was awarded in the January 2012 round, covers 14,220 sq km in 100-2,000 m of water 80-300 km off the coast.

Total has a 40% interest in the block, and OMV AG and Repsol have 30% each.


Sino Gas & Energy Holdings Ltd., Sydney, has spudded the first two coalbed methane wells on the Linxing production sharing contract area in the Ordos basin in China.

The work follows completion of a $100 million strategic partnership between Sino Gas and MIE Holdings Corp. LXSG-05 and LXSG-09 are to take 45 days to complete and core, and a 170 line-km seismic program is well advanced.

Sino Gas, MIE Holdings, China National Petroleum Corp., and China United CBM Corp. hold interests in the Sanjiaobei and Linxing PSCs which total 3,000 sq km in Shanxi Province in the Ordos basin.


Manas Petroleum Inc., Baar, Switzerland, said its Gobi Energy Partners LLC subsidiary has spudded the Ger Chuluu-A1 exploratory well on Block XIII in Mongolia.

Gobi Energy plans to drill to 1,200 m into the Jurassic. Its targets are Lower Zuunbayan and Tsagaantsav formations of Lower Cretaceous age.

The well is expected to reach target depth and be logged in mid-September at a cost of $1.8 million.

In case of a discovery, Gobi Energy will move in a workover rig and move the drilling rig to the site of its second exploratory well 170 km northeast of Ger Chuluu-A1.

Meanwhile, the 335 line-km 2012 seismic survey will be finished by August 25. The program consisted of detailed prospect seismic and regional seismic. The detailed prospect seismic forms the base for 2012 and 2013 drilling locations.


San Leon Energy PLC said Morocco's ONHYM has awarded the company more blocks at its Tarfaya oil shale project and extended the exclusivity period of the existing acreage.

San Leon was awarded four more blocks totaling 16 sq km. Blocks 13, 14, 15, and 16 can be mined and are candidates for the application of surface retorting processes.

The blocks are in addition to San Leon's existing 6,000 sq km awarded in 2009 under an exclusive memorandum of understanding dedicated to application of its in situ vapor extraction process (OGJ Online, Jan. 13, 2012).

ONHYM agreed to extend the duration of the exclusivity period of the original MOU for 2 years to March 2014 and to extend its scope to include application of any other ex situ (retort) process, San Leon said.

Genel Energy PLC will acquire an interest in the Sidi Moussa exploration permits offshore Morocco from a group led by Longreach Oil & Gas Ltd., London.

Genel will acquire a 60% equity interest pro rata from Longreach, Serica Sidi Moussa BV, and San Leon Offshore Morocco BV for a combined $1.3 million. Genel also will pay for drilling the commitment well required under terms of the first extension period, including full costs related to the ONHYM carried interest, up to $50 million.

As a result of the farmout, Longreach will have an ongoing 1.5% interest, Serica 5%, and San Leon 8.5%. The partners have already informed the Moroccan authorities of their intent to proceed into the first extension period.

The group has carried out extensive geological and geophysical analyses of the Sidi Moussa subsurface the past 21⁄2 years. Having identified several prospective exploration targets, a farmout process was initiated to attract a partner with the requisite financial and technical capability to drill in the relatively deep waters.

The contiguous Sidi Moussa and Foum Draa permits cover a combined 3.1 million acres in shallow to about 2,000 m of water west of Agadir. Prospective reservoirs are of Lower Tertiary, Upper and Lower Cretaceous, and Jurassic age at 2,000-4,000 m.

Cairn Energy PLC said its Capricorn Exploration & Development Co. Ltd. will take the lead in exploring the Foum Draa area offshore Morocco, subject to regulatory approval.

Cairn will acquire a 50% operated interest in the Foum Draa permits from the present participants, Serica Foum Draa BV, San Leon Offshore Morocco BV, and Longreach Oil & Gas Ventures Ltd. The three companies hold a combined 75% equity interest, and Morocco's ONHYM has 25% carried during the exploration and appraisal stage.

Cairn will pay its equity interest share of $1.5 million in past costs and the first $60 million towards the drilling of the commitment well required in the first extension period including the costs relating to ONHYM's carried interest.

As a result of the farmout, Serica will hold 8.3333% interest, San Leon 14.1667%, and Longreach 2.5%.

Cairn, through its acquisition of Nautical Petroleum PLC in June 2012, also has a 37.5% operated interest in the Cap Juby Maritime license off Morocco. Barrus Petroleum has 37.5% and ONHYM 25%.

That license includes the Cap Juby heavy oil accumulation and other oil plays in Mesozoic sequences in a basin with proven hydrocarbon potential. A 3D seismic survey is planned for 2012, and older data will be reprocessed to target deeper light oil objectives. A decision on future drilling will be subject to evaluation of the new data.

The block covers 5,600 sq km in 100-1,500 m of water off southern Morocco.


Total E&P Philippines BV has taken a farmout from Mitra Energy (Philippines SC-56) Ltd., Kuala Lumpur, to acquire a 75% interest in Service Contract 56 in Philippine waters of the southwestern Sulu Sea 600 miles south-southwest of Manila.

The block covers 4,300 sq km in 200-3,000 m of water northeast of Borneo Island in the Sandakan basin. Mitra will retain a 25% interest and will initially operate.

Under a new exploratory phase starting Sept. 1, Mitra will reprocess existing seismic and shoot 500 sq km of 3D seismic. Then it will transfer operatorship to Total for drilling.

ExxonMobil and BHP Billiton formerly held interests in a larger SC 56 block, and ExxonMobil drilled exploratory wells (OGJ Online, Jan. 7, 2009).


Horn Petroleum Corp. will plug and abandon the Shabeel North-1 exploratory well in Somalia but will enter the next exploration period on the Nugaal and Dharoor Valley production sharing contracts.

Shabeel North-1 went to a TD of 3,945 m and encountered metamorphic basement at 3,919 m. The well penetrated 149 m of interbedded sands and shales in the Triassic Adigrat formation with no oil or gas shows and only minor porosity on logs.

The Upper Cretaceous Jesomma sands had porosity and hydrocarbon shows but produced only fresh water on a drillstem test. These sands are similar to the Jesomma sands encountered in the previously drilled Shabeel well in terms of log response and oil and gas shows, and it was determined that further tests of these zones in the previously drilled Shabeel well are not warranted.

The next exploratory phase carries a commitment to drill one well on each block in 3 years. Horn Petroleum would shoot seismic to delineate new structural prospects on the Dharoor Valley block and hold discussions with the Puntland government to gain access regarding drill ready prospects on the Nugaal Valley block.

Horn Petroleum, 45% owned by Africa Oil Corp., Vancouver, BC, operates the Puntland exploration program with 60% working interest in the blocks. Range Resources Ltd. and Red Emperor Resources Ltd. have 20% each.


The Alaska Oil & Gas Conservation Commission has issued final approvals for Miller Energy Resources Inc., Knoxville, Tenn., to operate on the Osprey platform in Alaska's Cook Inlet, where it will rework five formerly producing oil wells.

A 2,000-ft sidetrack is planned in the second well. Osprey, in Redoubt Shoal field, has slots for 13 new wells that would target areas north and south of the developed, previously producing structure. On the platform is Rig 35, a new unit with top drive and automatic pipe handling equipment capable of drilling to 24,000 ft.

Miller is seeking permits for a 25-mile subsea oil pipeline from the Kustatan production facility across Cook Inlet to the Tesoro Corp.'s Kenai refinery.

Miller holds 723,000 acres of leases in Alaska, including 450,000 exploratory acres in the gas-prone Susitna basin.


Neon Energy Ltd., Perth, reported test flow rates from three wells in Paloma field in Kern County, Calif., and looks forward to further testing.

Testing of the shallow gas sand in the Paloma-3 well resulted in a maximum, unassisted flow of 2.2 MMcfd. Neon said it "expects to commercialize the gas on the back of a greater Paloma development, and has signed a gas sales agreement with a local purchaser." Two shallow gas sands remain to be tested.

At the Paloma Deep-2 well, the company recovered 36° gravity oil and a small gas flow from the McDonald sandstone. Pressure data suggest that the formation has relatively low permeability, but Neon said it may be commercialized as part of a full-field development.

Neon is preparing to test the Fruitvale formation and the Lower Stevens B sandstone, the primary objectives of the Paloma Deep-2 well. Tests of those zones in Paloma Deep-1 achieved maximum unassisted flows of 1.9 MMcfd of gas and 226 b/d of condensate.

At Paloma Deep-1 the extended test of the Lower Antelope shale recovered 131 bbl of oil, and the well was shut in to monitor pressure build-up.

The test will be resumed shortly with maximum drawdown to determine the reservoir's full deliverability potential of the reservoir, and the data will help determine the commercial viability of this unconventional zone. Then Neon will test the uppermost Paloma sand.


The US Bureau of Land Management is seeking comments on a proposal by Encana Oil & Gas to construct a 5-acre natural gas well pad in the Piceance basin 5 miles south of Rangely, Colo., BLM's White River field office announced on Aug. 31.

Comments should be submitted by Sept. 17 to be considered for an environmental assessment that is being prepared, it noted.

The proposal includes a 300-yd access road and a 6.5-mile, 12-in. buried pipeline that would parallel County Road 27, according to BLM. Encana plans to drill eight wells from the pad, it said.

The total disturbance prior to interim reclamation would involve 53.2 acres of BLM land and 11.8 acres of private land, the agency said.

Dejour Energy Inc., Denver, is moving in a rig to drill the first well at its 72% owned Kokopelli gas project in the Piceance basin in Colorado.

To spud within the week, the well is to be directionally drilled to the base of the Williams Fork member of Cretaceous Mesaverde, logged, cased, and turned to production by yearend 2012.

Its successful completion will secure for Dejour the substantial portion of the proven and probable undeveloped reserves that consulting engineers attribute to the Williams Fork section of this Kokopelli leasehold.

The company said the 2,200-acre project is ideally situated for exploitation of both the Williams Fork and Mancos hydrocarbon-laden shale bodies adjacent to acreage to the east, west, and north being developed by WPX and Bill Barrett Corp.

Construction started in late 2011 on the first drill pad, from which production expected to begin in the second half of 2012.


Rex Energy Corp., State College, Pa., said its technical teams have identified recompletion and infill opportunities in Gibson and Posey counties, Ind., in the Illinois basin as part of the company's focus on expanding its liquids production.

The company plans to drill seven new wells, and recomplete seven existing producers and has allocated $7 million to the projects. Rex believes the work could add 250-400 b/d of incremental production by the end of 2012.

Rex said it is evaluating other liquids opportunities on other fields in the basin.


Mesa Energy Holdings Inc., Dallas, has leased 1,525 net acres in Garfield and Major counties, Okla., bringing its total position to 3,245 net acres in the Mississippi lime play.

The new leases have a 3-year primary term plus option periods. Mesa also closed on a farmout with Twenty/Twenty Oil & Gas Inc. covering 1,720 net acres held by production. The Twenty/Twenty transaction also includes the outright purchase of three vertical Mississippi lime wells that will be operated by Mesa Midcontinent LLC, Mesa's Oklahoma operating subsidiary.

Mesa is to start a horizontal drilling program in the Mississippi lime in late 2012 or early 2013. Objectives are the Mississippi lime that is as thick as 500 ft at 7,000 ft and potentially the underlying Woodford shale 50-80 ft thick. Estimated ultimate recoveries from the Mississippi lime are 300,000-500,000 bbl/well.

Mesa continues to lease and to pursue agreements with operators to acquire HBP acreage.