Orca Energy Gives an Update on Operations at Cooper Basin, Texas

Orca Energy Limited (Orca or the Company) provided Tuesday the following update with respect to its Cooper Basin and Texas joint ventures in Australia and the United States, respectively.

Cooper Basin

Burruna-3 Discovery Well

The Burruna-3 discovery well has been fast-tracked for completion with surface facilities planned for installation in February. The well will be completed as a dual zone, selectable, free flow producer where the lower and upper Birkhead sandstones are expected to be productive. In November the well encountered approximately 9.8 feet (3 meters) of interpreted net pay in two zones in the lower Birkhead as well as good quality oil and gas shows in the Murta Formation, which is productive in the adjacent Fury (OGY 20 percent) and Mirage fields.

Initial production rates are predicted to be in excess of 500 barrels of oil per day (bopd) with increasing water cut. Once the formation has been proven to flow commercially the internal contingent resource estimates will be reclassified to reserves and released to the market.

Burruna-2 Production Well

The Burruna-2 production well is currently producing free flow oil from the Namur formation at a rate of approximately 430 bopd with 75 percent water cut. A proposed work-over in March will involve the installation of an electric submersible pump (ESP) and surface facilities which should approximately double gross fluid production rates and correspondingly increase the volume of oil being produced.

Production and sales for the previous quarter were in excess of 40,000 barrels of oil.

Murta Formation – Contingent Oil Resource

Together with its joint venture partner, Senex Energy Limited, Orca has quantified a significant contingent oil resource within the Murta Formation of the Fury JV (Burruna and Fury Blocks). The potential for Murta Formation oil production has been identified and tested from conventional wells, and has been shown to be potentially viable. As a result the following contingent resources have been estimated within the Murta Formation across the Fury JV:

  • Contingent Resource (recoverable oil, million barrels): 0.25 (1C); 0.52 (2C); 1.05 (3C)
  • Orca Working Interest (million barrels): 0.05 (1C); 0.104 (2C); 0.21 (3C)
  • Average recovery factor: 8 percent (1C); 13 percent (2C); 20 percent (3C)
  • Oil in place (million barrels): 2.37 (1C); 4.08 (2C); 7.04 (3C)

About the Murta Formation Reservoir

The Murta Formation is a regionally extensive package of thinly interbedded sandstone shale that lies above the primary production reservoirs of the Cooper-Eromanga Basin. The formation is commonly found to be highly saturated with net pay intervals of 13.1 feet (4 meters) to 52.4 feet (16 meters) in thickness.

Oil has been produced from the Murta Formation at Senex-operated fields with initial flow rates ranging from 20 to 200 bopd. Production from Senex-operated fields such as Mirage and Padulla demonstrates that while initial production rates are typically modest, the long term stabilized rates are likely to decline at only 3-4 percent per annum, providing consistent production.

A technical review of the formation in PEL-115 in the southern Cooper-Eromanga Basin revealed large volumes of oil in place. The Burruna-2 cores were highly saturated with oil that conventional wireline logging could not identify. Data from the Burruna-2 core also shows that the formation can be classified as an unconventional resource, where the use of modern production enhancement techniques, such as those used in North America, may increase Murta Formation recovery factors, production rates and overall field economics.

Petrophysical analysis indicates Murta Formation porosity is better developed at Burruna-3 than Burruna-2 at the same depth where oil saturation was identified in core.

Forward Work Program

Subject to regulatory approvals and rig availability, Senex plans to drill a pilot horizontal well to test the productive capacity of the reservoir. The Murta Formation in this region is expected to be intersected at a depth of approximately 4,265 to 4,593 feet (1,300 to 1,400 meters) true vertical depth. The pilot well is expected to assess a horizontal section of up to 3,281 feet (1,000 meters).

PEL 110

As announced in the most recent quarterly report, data processing under the Dundinna 3D seismic program commenced following completion of the acquisition phase of the program, which included 68.3 square miles (177 square kilometers) in PEL 110. Processed data is expected to be available for review at the end of 2Q 2014, to identify drillable prospects for possible drilling program towards the end of 2014.

Texas

Seabiscuit Project

Orca’s Joint Venture partner and operator, Dan A. Hughes Company (Hughes), advises that they are still moving forward with the Seabiscuit prospect, albeit without a specific spud date. Orca understands that Hughes is currently assessing alternative access routes with the intention of lowering overall costs.

With natural gas prices recently reaching a four-year high, Orca remains committed to the project and continues to work with Hughes to expedite the drilling of this highly prospective target.



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