Tap Oil Makes New Oil Discovery with Amulet-1 Exploration Well

Tap Oil says the Amulet-1 exploration well, located in Production License WA-8-L in the Dampier sub-basin, drilled to its revised total depth. Preliminary analysis of the log data indicates the presence of a 24-meter gross oil column. An oil water contact was confirmed by pressure data. The net oil column is approximately 20 meters with reservoir quality being considered reasonable at around 40-100 mD permeability and 20% porosity. Oil samples have been recovered to surface which suggest a light crude similar to that produced from the nearby Talisman field.

The evaluation program for Amulet-1 will continue over the next week. This program will include coring of the reservoir alongside the original vertical well, and then a sidetrack well approximately 500 meters away from the original vertical well, to evaluate the extent of the hydrocarbon bearing reservoir.

this was a sole risk well proposed by Tap oil original participants being Tap and Kufpec Australia Pty Ltd (Kufpec) at 50% equity each. Accordingly, Santos, which holds a 37.3685% interest in the permit elected not to participate in the drilling costs of this exploration well. On receiving the log data on the well, Santos has now elected to participate in the ongoing evaluation program pursuant to the WA-8-L Joint Operating Agreement. In summary, the JOA requires that if the discovery is developed and should Santos participate in that new field development then santos will relinquish its share of production to Tap and Kufpec until the proceeds from the sale of that production (less operating costs) equals a multiple of 15 times Santos' 27.3684% share of the well costs up to the election to participate in the forward program.

At this stage, the discovery of an oil field at Amulet-1 is encouraging however its commercial viability is yet to be established. The oil column intersected is below Tap's pre-drill expectations indicating that recoverable volumes are likely to be substantially less than pre-drill estimates. The forward evaluation program of coring and sidetracking will assist in estimating the recoverable volumes and hence provide an indication of the commerciality of the field. This information is expected to be available over the next few weeks.

Following Santos' election to participate in the forward program, the revised WA-8-L permit participants are Tap (Well Manager) with 20%; Santos (Permit Operator) with 37.3685%; and Kufpec with 42.6316%.