ARC Energy Spuds Yardarino 6 Gas Appraisal Well

ARC Energy reports that drilling of the gas appraisal well Yardarino 6 located in the onshore Perth Basin Production License L2, has commenced. The well is being drilled by the Century 11 rig.

The Yardarino 6 well is a deepening of the suspended Yardarino 5 well to test the Irwin River Coal Measures section (IRCM) that was gas productive in the recent Corybas 1 well.

The well program will include the drilling out of the suspension cement plugs and the deepening of the well from the current total depth of 2,557 meters to the proposed total depth of approximately 2,733 meters measured depth in the High Cliff Sandstone. The well will then be logged and wireline pressure measurements taken. If the results of the logging are encouraging the well will be completed as a potential gas producer and/or a candidate for further evaluation which may include fracture stimulation. The operation is expected to take 10 days.

Yardarino-5 is located approximately 13 kilometers east-northeast of the township of Dongara. The Yardarino 5 well was drilled in June 2001 as an appraisal of the Dongara Sandstone pool discovered by the Yardarino 1 well. Yardarino 5 failed to encounter hydrocarbons at the Dongara Sandstone level and was suspended in the top of the IRCM section with good gas shows.

Yardarino 5 is also located some 650 meters to the northeast of Yardarino 3 which was drilled in 1964. Yardarino 3 penetrated a full IRCM section. Strong gas shows were encountered and petrophysical analysis of the wireline logs over the IRCM section indicates that all sandstones are gas saturated and have similar reservoir properties to the zones which flowed gas in Corybas-1, however, the well was not adequately tested at the time.

Managing Director's comments:
"After the encouraging results of the Corybas 1 well which tested gas from the IRCM, the joint venture has agreed an appraisal program that entails the drilling of at least two more intersections of the reservoir with a testing and pressure sampling program and potentially a further evaluation program which may involve fracture stimulation or high angle drilling to establish commercial development parameters. Yardarino 6 is the first of the appraisal wells, and will be followed by a second appraisal well, Hakia 2, as soon as practicable after Yardarino 6, depending on rig availability."

Participants in L1 and L2 (excluding the Dongara, Mondarra and Yardarino fields) and Yardarino 6 are ARC Energy as operator with 50% and Origin Energy with the remaining 50%.