Arc Energy Evaluating Snottygobble Probe

ARC Energy is preparing to run production casing on the Snottygobble exploration well. Wireline logs and pressure samples have been obtained and an open hole drill stem test (DST) has been completed. Wireline log interpretation was ambiguous as to the flow potential of the well and it was decided to conduct a DST to provide information on pressures, production rate and possible formation damage.

The DST was a straddle test conducted over the interval 3,023 meters to 3,053 meters measured depth. Gas was produced to surface at a maximum rate of approximately 0.5 million cubic feet per day at a surface flowing pressure of approximately 140 psi on a 3/8 inch choke.

Managing Director, Eric Streitberg, commented: "Snottygobble looks more like a sniffle than a sneeze, but we have flowed gas, and proved the trap exists and the mapping of the 3D data set is valid. Snottygobble was also the deepest well we have drilled so far with this rig and we were at the limit of its capacity. This was also the first time we have done an open hole DST with this rig, and it was of a high pressure gas zone.

"Although everything went very well and is a credit to the crews involved, it's now an opportune time for us to pause the onshore drilling program. This will allow us to thoroughly assess the results of Snottygobble and of all the wells we have drilled to date, as well as mobilize a new, larger rig. It will allow us to determine the best way forward insofar as which rig we use, which prospects we drill next etc. When we then restart the onshore drilling around the middle of the year, we will be able to target the best prospects with the appropriate rig. We are also looking forward to the start of the offshore exploration program as soon as the Cliff Head development drilling program is finished."

A decision on the forward program for the well after the production casing has been run will be made shortly when all the data from the DST has been analyzed. Century Rig 11 will then be used to conduct a workover of the Xyris 1 well to replace the production tubing.

Participants in L1 and L2 (excluding the Dongara, Mondarra and Yardarino fields) are ARC Energy as operator with 50% and Origin Energy with 50%. Origin is not participating in the drilling of the Snottygobble 1 well and consequently ARC is drilling the well as a Sole Risk Project