Norwest Energy (NWE) announced it intends to proceed with plans for exploration permit EP413 in Australia following the release of an encouraging reserves evaluation report by independent consultant DeGolyer & MacNaughton (D&M).
D&M said the best P50 estimate for the overall recoverable resources – comprising oil, gas and condensate – was around 450 million barrels of oil equivalent (MMboe). Oil comprised around 9 million barrels of oil, 2.64 billion cubic feet of gas and 2.1 million barrels of oil condensate.
NWE Executive Director Peter Munachen said “the report provides us with the confidence that we have substantial prospective accumulations of hydrocarbons,” adding that “the funds we have invested are now being converted into positive results and this positions us well to continue our work at Arrowsmith.”
The D&M report is the first detailed assessment of the shale formations in the northern Perth Basin. The focus of the report has been on the shale gas fairway comprising a gross area of 61.8 square miles (160 square kilometers) to the east of the Beagle Fault which dissects the EP413 block. The prospective resource estimation considers the mean potential productive area to be approximately 34.8 square miles (90 square kilometers).
NWE said there is “considerable upside as further exploration continues. However, there is no certainty that any portion of the prospective resources estimated by D&M will be discovered and if discovered that they will be commercially viable.”
The D&M estimate “has gone a long way to highlighting the prospectivity of EP413 and a resource of 2.6 Bcf is certainly enough to be a commercial field, however more must be learnt from the results of Arrowsmith-2 and its surround before an assessment of commerciality can be pushed,” Hartleys Limited, which helped to raise funds for the Arrowsmith project, added.
NWE will continue to gather data and flowback the Arrowsmith-2 well in coming months. To fully evaluate the four formations - Kockatea Shale, Carynginia Formation, Irwin River Coal Measures and the High Cliff Sandstone, a completion has been designed to assist in fluid recovery and to allow a well test to be carried out on the tight High Cliff Sandstone interval at the bottom of the well. Timing has not been confirmed as much of the componentry is being custom-built overseas, with inherently long lead times. A 3D seismic program is planned for late 2013 to assist field development and to finalize future well locations, well spacing and well trajectories.
EP413 covers an area of 196.1 square miles (508 square kilometers), with operator NWE holding a 27.945 percent interest, while AWE Limited and Bharat PetroResources Ltd. each hold interest of 44.252 percent and 27.803 percent respectively.
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