Amity Oil to Abandon Whicher Range 5 Well

Operations to retrieve the jars and remaining stuck drill string from the Whicher Range 5 Well in Australia were unsuccessful. No further attempts are going to be made to extract the stuck pipe, as there is a very low probability of success. A cement plug has been set across the top of the 7 inch liner from 3,720 meters back to 3,680 meters.

The joint venture has now approved a proposal to sidetrack a further time from above the reservoir by milling a window in the 9 5/8 inch casing at around 3,680 meters, which the drill string will pass through. A new hole would then be drilled from that point to a depth of approximately 4,300 meters with a KCL fluid.

Once the target depth is reached, wireline logs will be run. Results from these logs will determine the extent of any test program to be undertaken.

Progress to date
We have learned a great deal about the viability of air drilling the Sue Group sandstones in the Whicher Range field through the drilling of Whicher Range-5. Twice, after successfully air drilling two separate sections, the unstable nature of the formation defeated our attempts to proceed by caving in and sticking the drill pipe. It now unfortunately seems that this technology is not suitable for drilling this formation, vertically or probably horizontally. Disappointingly, the gas flow rate through these two air drilled sections did not reach the minimum commercial threshold, or sustain a gas flare. This is a fairly strong indication that air drilling alone may not be sufficient to generate a sustainable commercial flow rate. The reservoir quality is however variable throughout the vertical section and better quality sands may produce gas at a better flow rate.

Short exposure to KCL fluids does not seem to have had a seriously detrimental effect on the reservoir section that was later allowed to flow during the air drilling, however the stated aim of this program was to minimize or eliminate fluid contact with the reservoir. Re-drilling the section, even with a relatively benign KCL solution may not give any better result than the previous wells.

Forward Program
It is estimated that the sidetrack plan (including logging) will take 14 to 16 days, on a trouble free basis.

In brief, the plan involves running in the hole with the drill string to polish the hardened cement plug (a cement plug has been set across the top of 7inch liner from 3,720 meters back to 3,680 meters) to within 1.0 meter to 1.5 meters above a casing collar. A mechanical wedge or "whipstock" will then be placed on top of the cement and a special bit will then mill a window in the 9 5/8 inch casing. The normal drilling assembly will be run in the hole through the window and an 8½ inch hole will be drilled to approximately 4,300 meters. After the hole is logged, requirements and options for testing will be evaluated. Any operations from this point would be planned in such a way as to preserve the option to stimulate the well.

If reservoir stimulation is required, a full scale liquid carbon dioxide frac will be considered or alternatively coiled tubing horizontal drilling may be used to increase the flow rate. This action could also be executed on one of the previous Whicher Range wells.

Partners in the Whicher Range 5 Well are Amity Oil as operator with 47.957%: KNOC with 20%; Seoul City Gas Company with 15% and GeoPetro Resources with 17.043%.