Roc Oil & Partners to Develop Cliff Head Field

The WA-286-P Joint Venture has taken a Final Investment Decision with regard to the Cliff Head Oil Field, offshore Western Australia, which will result in the field being developed for production, subject to receipt of final Government approvals. First oil is expected to flow within 12 months at an initial rate in excess of 10,000 BOPD through facilities with 15,000 BOPD capacity. Proven and probable field reserves, in the fully appraised part of the Cliff Head structure, are currently estimated to be about 14 MMBO. There is upside reserve potential in areas adjacent to the field which are currently undrilled but which will be accessible from the production platform. The total development cost is expected to be A$227 million. Within the context of Australia's offshore oil and gas industry, the Cliff Head Development Project represents a number of "firsts", including the first oil field to be developed in the offshore Perth Basin.

Roc Oil (WA) Pty Ltd, a wholly owned subsidiary of Roc Oil Company Limited ("ROC"), operator for and on behalf of the WA-286-P Joint Venture (the "Joint Venture"), is pleased to advise that the Joint Venture has taken a Final Investment Decision with regard to the development of the Cliff Head Oil Field in the offshore Perth Basin, Western Australia.

As a result, production is expected to start within 12 months, subject to receipt of final Government approvals. Initial production rates will be in excess of 10,000 BOPD through facilities with 15,000 BOPD design capacity.

Proved and probable recoverable reserves are estimated to be in the order of 14 MMBO within that part of the field which has been fully appraised. Additional possible as yet undrilled reserve potential exists in three adjacent areas that will be accessible from the Cliff Head production platform. Specifically:

  • Previously, the reservoir sand sequence in the northwestern part of the Cliff Head structure was mapped as being below the field's oil-water contact. Subsequent to the integration of seismic velocity data acquired from the drilling of the Cliff Head-5 and Cliff Head-6 wells, the latest seismic mapping now suggests that a significant amount of potential reservoir in this part of the structure may be above the field's oil-water contact.
  • To the east of the field, as currently mapped, there are shallow water shoals which have previously prevented the acquisition of seismic data. However, because of encouraging results from a current transition zone 2D seismic survey in very shallow waters in WA-286-P and the adjacent TP/15, it is now proposed that this survey be extended so as to better define the potential of the area immediately east of the Cliff Head Oil Field.
  • To the northeast of the field, the current very shallow water transition zone 2D seismic survey has also indicated that reserve potential may exist up-dip from Mentelle-1, an exploration well, drilled in 2003, which had significant residual oil shows in the upper part of the reservoir objective.

The Cliff Head Oil Field Development Project is expected to cost a total of approximately A$227 million. There are four main components:

  • Offshore Platform: A small, normally unmanned, offshore platform with seven active wells: five oil producers and two water injectors. The platform will also have two spare slots to allow for the drilling of additional wells in the future. The first of the five oil producing wells, Cliff Head-6, was drilled to Total Depth and cased last week and, as of today, has been suspended for future production. The platform will be located in 18 meters of water, 11 km from the coast and 14 km from an onshore processing plant at Arrowsmith.
  • Pipelines and Umbilicals: Two 14 km 250 mm pipelines, plus umbilicals, will link the platform to the onshore processing plant. One pipeline will transport oil from the platform to the plant. The other pipeline will transport produced water from the plant to the platform for re-injection into the reservoir. The pipelines and umbilicals will be installed by using directional drilling techniques under the beach.
  • Onshore Processing Plant: A processing plant will be constructed at Arrowsmith on a site formerly occupied by a lime plant. The Arrowsmith Plant will provide crude oil stabilization and separation facilities and also water injection pumping capability. As a result of a recent exchange of letters of intent, the oil is expected to be trucked approximately 350 km from the Arrowsmith plant to the BP oil refinery at Kwinana, south of Perth.
  • Drilling: The drilling of the four remaining producing wells and two water injection wells represents approximately 30% of the capital cost of the project. All producing wells will be highly deviated, with three currently planned as horizontal wells.

    As a result of a tender process initiated last year, a number of agreements have been negotiated with several contractors, including Ensco Australia Pty Ltd, which will supply the Ensco 67 jack-up drilling rig.

    Day-to-day management of the construction and installation phase of the Cliff Head Development Project will be based in ROC's Perth office where a project team, under the leadership of Mr Duncan Mitchell, was established in 2004 during the Front End Engineering and Design ("FEED") stage of the project. Mr Mitchell, with more than 20 years experience in the contracting industry, mainly with international contractor Kellogg Brown and Root, has been working with ROC on the Cliff Head Development since early 2004. The drilling and completion component of the project will be managed out of ROC's Sydney office.

Cliff Head will be the first field to be developed in the offshore Perth Basin. In fact, the field will be the first oil field to be developed off the Western Australian coast south of the Exmouth Sub-basin, some 1,000 km to the north. The field is also the first oil field to be discovered and developed offshore Australia by a Joint Venture the majority (71%) of which is owned by junior Australian oil companies, one of which is the operator.

At the moment there are only four Australian publicly-listed companies that produce oil – as opposed to gas and/or condensate – offshore Australia: BHP Billiton Limited Woodside Petroleum Limited, Santos Limited and Tap Oil Limited. When the Cliff Head development is complete there will be three more Australian public companies joining this list of offshore oil producers: Australian Worldwide Exploration Ltd, Voyager Energy Limited and ROC.

The Cliff Head Joint Venture comprises of Roc Oil as operator with 37.5%; AWE with 27.5%; Wandoo Petroleum with 24%; Voyager with 6% and CIECO Exploration with 5%.