AED Acquires Talbot Oil Field
AED Oil Limited has completed its acquisition of Retention Lease AC/RL1 including the Talbot Oil Field. The effective date of the acquisition is July 2, 2007.
Oil Initially in Place (OIIP) has been calculated as 21.8 million stock tank barrels (MMstb) by and independent expert, with a range form 13 to 30 MMstb. This is based impart on data and mapping from previous operators together with reservoir simulation modeling performed by the independent expert. A recovery factor range form 20% to 60% is estimated based on other comparable oil fields in the Timor Sea.
The Talbot field was identified by AED as an opportunity to expand its regional operations on a synergistic basis at the time of the original acquisition of the Puffin Field. AED has been in negotiations to acquire this field for some years. The total acquisition cost is calculated as AUD 2.65 million inclusive of remaining work program commitments.
AC/RL1 is located in the Ashmore and Cartier Islands region in uncontested Australian waters of the Timor Sea and consists of one graticular block covering an area of 83 square kilometers. It is approximately 600 kilometers west of Darwin, approximately 50 kilometers south of the producing Jabiru/Challis oilfields and is 65 kilometers east of AED's Puffin field. The Retention Lease is situated on the boundary between the Vulcan Sub-basin to the northwest and the Londonerry High to the southeast. Water depths vary from 50 to 105 meters.
The Retention Lease is covered by a regional grid of modern 2D seismic lines and by a reprocessed 3D Seismic Survey. Botht he 2D and 3D reprocessed seismic data and other geological information is included as part of the acquisition.
Two wells have been drilled in AC/RL1, Talbot-1 and Talbot-2 by Santos in 1989 and 1990. Both wells were tested and flowed at rates of up to approximately 5000 BOPD. The crude oil is 49 degrees API with a Gas Oil Ratio (GOR) of 742 scf/stb and a low viscosity of 0.3 cp at reservoir conditions. There is a small gas cap with a Gas Oil Contact (GOC) at 1501.2 (TVDSS) and a gross 90m oil column to 1530.2 TVDSS at the Oil Water Contact (OWC). The reservoir sand is Triassic Challis formation with an average Net to Gross ratio of 48%, porosity of 19% and a highly variable permeability up to 750 md. The field is underlain by a residual oil column 37m thick. Some of this residual oil may potentially be recoverable but has not been included in the resource estimates.
AED is undertaking an evaluation and appraisal/development program with an objective of achieving production from this field by late 2008. The preliminary development concept is based on the drilling of a new production well with dual lateral horizontal wellbores and an initial gas cap blowdown followed by oil production and water injection. This type of development model has been successfully used in other fields in the Timor Sea region. Initial reservoir simulation modeling indicates OIIP it he order of 21 million barrels with recovery factor range up to 50%.
The Talbot field acquisition provides AED an opportunity to profitably develop this field. Additionally it also has exploration potential and may provide synergies with the Puffin field development including the Puffin Southwest region development which is presently being considered.
Evaluations and data herein are based on data collected and evaluation of logs, etc by previous operators and on resource evaluation and interpretations by independent expert, Dr. Andrew Wadsley of EPC Pty Ltd. The methodology used is in accordance with the Society of Petroleum Engineers' definitions. OIIP refers to the estimated volume of hydrocarbon liquids in situ in the reservoir. Only a portion of the OIIP can be physically and commercially recovered to surface. This portion is represented by the recovery factor. AED is currently calculating and evaluation the recovery factor by means of reservoir simulation and other techniques.