AED Oil, which plans to start producing crude oil from the field in the first quarter of next year, is also investigating drilling a further development well to increase oil production rates at first oil.
A major new interpretation of the Puffin oil field by consultants acting for AED Oil, has resulted in a substantial upgrade to the expected Oil Initially In Place (OIIP) and the regional prospectivity, enhancing the attraction of a number of existing exploration targets, as well as identifying new leads and prospects. Revised maps prepared by RPS Group PLC, a major international oil consulting group, have incorporated information from the recent Puffin-9 and Puffin-7 wells, integrating that information with data from all previous wells. These maps will be finalized when the reprocessed Onnia seismic data becomes available.
Based on results of recent drilling and 3D seismic survey information recently obtained, AED Oil's estimate of oil in place with in Puffin North East has risen from 13 million barrels of oil (OIIP) to in excess of 90 million barrels (OIIP).
Oil initially in place (OIIP) refers to the estimated volume of hydrocarbon liquids in situ in the reservoir. Only a proportion of OIIP can be physically and commercially recovered to surface. This proportion is the recovery factor. AED Oil is currently calculating and evaluating the recovery factor by means of reservoir simulation and other techniques. A revised reserve statement will be released following an independent review of this work.
As a result of the new interpretations and information AED's initial evaluation indicated the known oil bearing structures are likely to cover a much larger area, than previously envisaged, and should contain significantly greater volumes of oil than previously estimated. The increase in OIIP within the Puffin field is expected to result in a subsequent increase in Proved Reserves.
AED Oil is currently determining Proved Reserves, which currently stand at (P90) 10.4 million barrels of oil, which were based on the pre-drill interpretations. A significant upward revision is expected on completion of ongoing studies expected to be completed in the fourth quarter of 2006.
Oil production from Puffin field is expected to commence early in 2007 using a Floating Production Storage and Offloading (FPSO) facility. First oil production will be from Puffin North East with initial flow rates of 18,000 barrels of oil per day.
Initial production rates could increase as recent work on Puffin North East suggest that drilling of a further development well into the reservoir could increase initial production to around 30,0000 barrels a day. AED Oil is currently undertaking a study of the costs and process to complete an additional production well in time for first oil. The company has a drill slot available in December 2006 and has much of the completion equipment available. In addition, the company is reviewing the need for further wells to maximize future oil recovery.
The Puffin oil field is located in Australian territorial waters, 700 km west of Darwin and 80 km south west of the Jabiru and Challis oil fields and 25 km from the Skua oil field. The first reservoir of the field was discovered in 1972 by Arco, Inc. Oil in the Puffin field is in two primary reservoirs, the Uppper K1A and Lower K1A sandstones. AED Oil has reserves in two regions of the field, Puffin North East comprising Puffin 1, 5 and 7, and Puffin South West comprising of Puffin 2 and 9.
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