ARC Energy to Start Long-Term Production Testing on Dongara 35 Well

ARC Energy reports that the oil appraisal well Dongara 35, operated by ARC and located in the onshore Perth Basin Production License L2, has been drilled to a total depth of 1,834 meters and wireline logging and pressure sampling has been completed. The current operation is preparing to run production casing.

The principal objective Dongara Sandstone was encountered on prognosis at 1,709 meters measured depth and is interpreted to have good reservoir quality. Interpretation of wireline data indicates that the original oil column in the Dongara Sandstone was encountered as prognosed. However, interpretation of the pressure and fluid sampling data is unable to conclusively resolve whether the oil saturations are too low to be economically producible. Consequently, it is intended to complete the well and conduct a long term production test of the Dongara Sandstone reservoir as soon as practicable.

In addition to the hydrocarbons encountered in the Dongara Sandstone, strong oil and gas shows were noted in the Arranoo Sands above the Dongara Sandstone. These sands will also require a long term production test to determine their economic viability and this will be commenced as soon as practicable after the Dongara test.

Managing Director's comments:
"This result validates the structural mapping of the Dongara Field using the new 3D seismic data set from the Denison survey and represents a major advance over previous attempts to properly image the field in depth. Using the new data, the well was drilled targeting the oil column in a position interpreted to have been protected from water influx when the gas was produced from the field. Although it appears there has been water influx into the reservoir, we may still be able to produce oil, and we need to give it a good pump test to see whether there is any moveable oil still there.

The presence of an apparent oil column in the Arranoo sandstone is unexpected and very welcome, and is interpreted to be in a separate pool to that drained by the existing Arranoo producers, although we will need to get some longer term production data to see what reserves we might have."

Participants in Dongara 35 are ARC Energy Limited - 100% (Operator).