Karoon Gas Australia Ltd. reported Tuesday that a semisubmersible drilling rig has been contracted to drill the first well for Apache Corp. and Karoon in the northern Carnarvon Basin exploration permit WA-482-P offshore Western Australia. The Levitt-1 exploration well is expected to spud during May.
Karoon was advised on Friday afternoon March 20, by the Operator, Apache Northwest Pty Ltd., that the Diamond Offshore Ocean America (DW semisub), has now been contracted to drill Levitt-1.
Subsequent to the farm-out of a 50 percent equity interest in the permit to Apache during May 2014, Apache will be responsible for 90 perfent of the cost of the Levitt-1 exploration well up to a total well cost of $70 million. The net to Karoon dry hole cost is estimated to be approximately $5 million.
The Levitt Prospect
The drilling of the Levitt prospect represents a significant milestone for Karoon. It is the first exploration target to be drilled by the joint venture in this new and very large exploration permit, covering 5,227 square miles (13,539 square kilometers). Exploration in the permit will evaluate new plays in the northern part of the Carnarvon Basin, with Levitt-1 to be the first well in what is expected to be an ongoing exploration program over a number of years.
The permit contains a multi-billion barrel prospective oil resource (as assessed by DeGolyer and MacNaughton) in six prospects identified in the Canning 3D seismic survey area which covers a third of the permit area. Additional prospectivity over the permit area is expected to be identified through the interpretation of existing 2D and 3D seismic data and the 2,029 square mile (5,256 square kilometer) Capreolus 3D seismic survey program currently being acquired.
The Levitt-1 exploration well is targeting an unrisked gross prospective resource best estimate of 220 million barrels in the Legendre and North Rankin formations. The well is positioned to receive migrating hydrocarbons from the oil mature Early Jurassic source kitchen located in the central and eastern side of the permit.
Prospective Resource Volumes
The prospective resource volumes have been independently assessed by DeGolyer and MacNaughton and disclosed in Karoon’s April 30, 2014 announcement.
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