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Senecio Tight Gas Feasibility Study Underway

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AWE disclosed Thursday that it has started on a development feasibility study for the commercialization of the onshore Senecio tight gas accumulation. The Senecio discovery is located in the north Perth Basin, Western Australia.

Analysis of pressure tests conducted in November 2012 and other data captured since the fracture stimulation has confirmed permeability of between 0.03 millidarcy (mD) to 0.06 mD, which is within the pre-fracture estimated range.

"This analysis, together with the successful flow test in September 2012 that reported a stabilized gas rate of 1.35 million standard cubic feet of gas per day, with a 16-foot (five-meter) perforation interval, demonstrates potentially commercial reservoir flow capacity," AWE said in a statement. AWE's project partner is Origin Energy. Both of the companies have an equal stake in the partnership.

AWE has previously booked a 2C contingent resource for its 50 percent equity share of Senecio of 4.4 million barrels of oil equivalent (mmboe). Previously interpreted 2D seismic data indicated a potential estimated recoverable volume of at least double the quantity currently booked. An outcome of the feasibility study will be an updated definitive resource estimate which will be based on latest interpretation of the well data, the new 3D seismic data, and planned reservoir modeling studies.

AWE's Managing Director Bruce Clement, said that the Senecio tight gas commercialization program is gaining momentum and that positive subsurface data has given the company considerable confidence that commercial gas production can be achieved from the Senecio discovery.

"The results of the pressure test, the flow test, and the Irwin 3D seismic program indicate that a horizontal, multi-stage, hydraulically fracture stimulated well at Senecio could be economically viable," Clement noted in a statement.

"The Perth Basin is potentially a very important source of energy for the Western Australian market and we believe that the timely completion of a development feasibility study will help define a valuable gas resource," Clement added.

AWE plans to consider the use of nearby existing plant processing infrastructure to minimize the project's environmental footprint and development costs. Evaluation of the Dongara and Xyris gas plants and associated infrastructure will form part of the study.
Detailed work on project planning, budget and product marketing may start as soon as 2Q 2013.

Clement said: "The unconventional gas program in the Perth Basin has been very successful to date, significantly increasing our understanding of the geological and commercial potential of the tight gas and shale gas opportunities in the Basin.

Our exploration team is looking at 30 years of accumulated data for the Perth Basin, compiled through conventional oil and gas exploration activities, to identify additional tight gas intersections with development potential."



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