Blue Energy Fails to Find Hydrocarbons at Marburg 1 Well in Surat Basin

Exploration company Blue Energy Limited provided Thursday the following update in respect of the Company’s Marburg 1 oil exploration well in ATP854P, Surat Basin, Central Queensland, Australia.

Testing operations on the Marburg 1 well have now been completed with the primary target zone test (Precipice Sandstone) giving no evidence of producible hydrocarbons.

Three separate zones within the gross interval from 1,669 feet (509 meters) to 1,735 feet (529 meters) rotary table (RT) were tested to assess high, medium and low permeability zones in the Precipice Sandstone over intervals where good oil fluorescence was observed during the initial drilling of the previously suspended well. It is apparent that the Precipice Sandstone at the Marburg 1 location contains very fresh water, which gives an electric log response very similar to that for oil (i.e. high resistivity).

As a result of this testing program, the Marburg 1 well will now be plugged and abandoned.

As previously advised, Blue Energy farmed out the drilling of the Marburg 1 oil well and the cost of this current testing program is covered by the farm out agreement.

The fact that the Marburg 1 encountered hydrocarbon fluorescence in the Precipice will now be incorporated into the regional hydrocarbon model and the seriatim of conventional Jurassic oil exploration leads and prospects currently identified within ATP854P will be revised accordingly.

In addition ATP854P is assessed by Netherland and Sewell and Associates to contain approximately 100 petajoules (PJ) of Coal Seam Gas contingent resources in the Permian Bandanna Coal Measures. The permit is located approximately 12 miles (20 kilometers) West South West of the Fairview and Spring Gully CSG Fields and the north eastern portion of ATP854P is also immediately adjacent to the Spring Rock CSG producing hub in PL 92 (Fairview PL).


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