Palm Valley-12 failure forces rethink for Central Petroleum

Central Petroleum Ltd., Brisbane, plugged its Palm Valley-12 ST1 sidetrack well in production license OL3 in Amadeus basin, Northern Territory, after the target P2 and P3 units in Pacoota sandstone recovered formation water.

The company will now prepare to sidetrack into the P1 unit of the Pacoota sand—the gas-producing reservoir in Palm Valley field. If successful, the Palm Valley-12 ST2 lateral will be tied into existing production infrastructure and sold into the Northern Territory and East Coast markets.

Despite the disappointing PV-12 ST1 result, the company has learned about fracture systems at the field and must be done to test deeper reservoirs in the future, said Leon Devaney, chief executive officer and managing director.

Palm Valley field remains robust, he said, and the focus now be on working to increase gas sales through the PV-12 ST2 lateral in the P1 reservoir.

Central is operator with 50% interest. Partners are Zealand Oil and Gas Ltd. (35%) and Cue Energy Resources Ltd. (15%).

Considering the unsuccessful PV-12 ST1 and the lack of other technical successes in recent years, the company plans a strategic review to assess options for its exploration, appraisal, and production assets and examine opportunities in the current market and capital landscape, Devaney said.