Perth Basin domestic gas producer Empire Oil & Gas NL provided Tuesday the following update on the testing operations currently underway at its 100 percent owned Red Gully North-1 (RGN-1) discovery in permit EP 389 in Western Australia. As announced to the ASX on April 13, the testing operations at RGN-1 have taken longer than expected due to fluid losses during the completion program.
RGN-1 was perforated over 3 test intervals within the Cattamarra C and D sands which were interpreted to be gas bearing:
Testing operations commenced over the Cattamarra C interval. Some 490 barrels of fluid were recovered before the well began to flow naturally. The well then flowed 0.067 million cubic feet (MMcf) of gas and 15 barrels of condensate and 895 barrels of water were recovered during a flow period of 19.5 hours. The gas and condensate flow rates prior to shut-in were 0.13 MMcf per day (MMcf/d) and 18 barrels per day respectively. The final water rate was 1,090 barrels of water per day.
Following the completion of the C sand test, a separate test of the upper zone of the Cattamarra D sand was conducted. A flow period of 26.5 hours was undertaken prior to shutting-in the well for a 48 hour build up to obtain down hole pressure data. During the flow period the well was nitrogen lifted and flowed gas at an increasing rate. The rate prior to shut-in was 0.392 MMcf/d with an approximate condensate rate of 121 barrels per day. The gas flow was accompanied by significant water production which reached a maximum of 2,300 barrels per day prior to shutting in the well.
Water production is interpreted to be due to a poor cement bond over the Cattamarra C & Upper D intervals as evidenced by the cement bond log. During the drilling of the Cattamarra sands, shale was produced to surface resulting in large washed out hole sections which has compromised the cement integrity. It is possible that the tests of the upper two zones are invalid, given potential communication with water bearing reservoirs just above the Cattamarra Upper C interval. The high water flows from the upper two test zones are unusual given the interpreted low permeability of the sandstone intervals which were tested. Further analysis will be required to understand the validity of these tests once all water, gas and condensate samples have been analyzed and pressure gauge data has been collected.
The well is currently shut-in to obtain downhole pressure from the Upper D sand interval prior to undertaking the test of the Lower D sand later this week. The cement bond log indicates that the cement bond over the Lower D zone is good and zonal isolation is more likely to be achieved.
Empire CEO Ken Aitken said "While the initial results of the tests on the Cattamarra C and Upper D intervals may be invalid, and therefore disappointing, the fact that hydrocarbons have been recovered confirms the original petrophysical assessment of a gas/condensate discovery. The recovered hydrocarbons also suggest a condensate rich discovery with recovered gas yielding approximately 160 barrels/MMscf as measured at surface. Further work will be required to determine the most appropriate means to conclusively test the flow potential and therefore the commerciality of these intervals."
Following successful drilling operations, RGN-1 was suspended on Dec. 29, 2015. RGN-1 is located in EP 389, approximately 2.5 miles (4 kilometers) to the north of the Empire's 100 percent owned Red Gully Processing Facility. RGN-1's proximity to the Red Gully Processing facility will allow for a faster tie-back and commercialization of the well after a successful completion and test program.
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