Denison 3D Seismic Survey Commences

ARC Energy reports that the Denison 3D seismic survey commenced on November 16th with the mobilization of line preparation crews, surveyors, and environmental and landholder liaison personnel.

It is expected that field data acquisition by the Terrex seismic crew will commence in early December once sufficient lines have been prepared for a full acquisition spread to be laid out.

The survey is being acquired over the highly prospective oil trend on the western side of the L1/L2 licence and over the adjacent L14 licence. It will cover the Jingemia and Eremia fields and the leads and prospects identified from the existing sparse 2D seismic data and gravity surveys.

It is intended to "fast track" the processing of the central portion of the survey over the Eremia and Jingemia oil fields, and the prospective structures adjacent to these fields, and to commence drilling on these areas as early as practicable in the new year.

The Denison Survey is the largest 3D seismic survey to be acquired onshore Western Australia and one of the most complex 3D surveys to be acquired anywhere in Australia onshore or offshore. It will cover approximately 400 square kilometers and will take up to four months to acquire. Approvals for the survey have taken considerable time to obtain due to the number and diversity of the parties involved and the complexity of the infrastructure in the survey area. These approvals have involved over 280 private landowners and other stakeholders, railway rights of way, the northwest highway, gas pipelines and local authority infrastructure. Numerous government agencies have been involved including environmental, agriculture, transport and infrastructure agencies at state and local levels.

Considerable care is being taken to ensure that the survey is conducted in a safe and environmentally acceptable manner and that as little disturbance as possible is caused to the local community and the natural environment.

Participants in L1 and L2 (excluding the Dongara, Mondarra and Yardarino fields), and the Denison seismic survey are:

ARC Energy Limited - 50% (Operator)
Origin Energy Developments Pty Ltd - 50%

Managing Director's comment:

"The commencement of the Denison seismic survey has been another major achievement for the ARC team. It has required months of intense work and focus in parallel with all the other activities that ARC has been undertaking.

We are extremely positive about the survey and the results we expect to obtain from it. Drilling on the existing 3D surveys in the area has resulted in an unprecedented success rate during the recent gas exploration program and we believe that the Denison survey will allow us to achieve a similar improvement in success rates for the oil exploration program.

The area of the survey has only sparse existing seismic data but this has shown us that there are numerous structures that look similar to our existing oil fields. If the 3D survey substantiates these prospects we are confident of further drilling success.

We look forward to completing the survey and using the results to find additional oil and gas resources for the people of Western Australia."