Flax Discovery May Prove to be Australia's Largest Onshore Oilfield

Innamincka Petroleum announced today that the Flax East 1 well confirmed that the PEL 103 Joint Venture oil discoveries, Flax and Juniper, are connected. The confirmation reports a significant increase in the assessed inplace oil resource.

“There is now a reasonable basis for concluding the Flax and Juniper discoveries will prove to be one of the largest onshore oilfields in Australia,” stated the company in the release.

Analysis of Flax East 1 wireline log data shows that the target Patchawarra Formation and Tirrawarra Sandstone are hydrocarbon saturated and there is no evidence of water-saturated sandstones. Total pay thickness is estimated at 14.8 meters, and a net pay of 10.2 meters is located in the primary zone of interest of the basal Patchawarra Formation-Tirrawarra Sandstone interval. Additionally, sandstone development for this zone is better than that of most wells drilled to date in the region.

The well, which was cased and suspended for future production, proves the presence of oil through the structural saddle between the Flax and Juniper oilfields, as well as lowers the LKO level to -2,653 meters subsea.

Previous assessments of the fields, conducted in 2006 showed a combined area of 33 square kilometers. Now, results point to the field area measuring approximately 120 square kilometers.

All eight wells drilled in the field area by the PEL 103 Joint Venture encountered oil-saturated sandstones in the primary target interval, with an average net pay thickness of approximately 7 meters. Inplace resource for the combined field above the new LKO is about 120 MMb/d.

Four fracture stimulation operations have been conducted on the Flax field since early August of this year. Flowrate capacity for Flax 1 is 300-350 bopd, while the initial flowback for Flax 2 is 200 bbls fluid per day (150 bopd, 50 bpd frac fluid), the flowrate for Flax 3 is 700 bbls fluid per day (580 bopd, 120 bpd frac fluid), and the flowrate for Flax 4 is 200 bbls fluid per day (160 bopd, 40 bpd frac fluid).

The installation of temporary flowlines connecting the four wells is expected to be finished for production to begin by the middle of October. A compressor unit is scheduled for installation by late October, after which injection of produced gas via the Flax 1 well will begin.

Project participants are operator Innamincka (75 percent) and SCGAU (25 percent).