Magellan to Spud Gregory River-3 Well

Magellan Petroleum will spud the Gregory River-3 well in AT 613P in the Maryborough Basin of Queensland next week. OD&E Rig 20 has been mobilized to drill the well and is presently rigging up on location. Magellan Petroleum (Eastern) Pty Ltd (a wholly-owned subsidiary of Magellan Petroleum Australia Limited) is operator of the drilling.

The Gregory River-3 well is located approximately 30 kilometers south of the town of Bundaberg, and some 250 kilometers north of Brisbane within the Maryborough Basin.

The well is planned to be drilled to a total depth of 3200 meters and is targeting the gas saturated reservoirs of the Early Cretaceous Gregory Sandstone and is located approximately 200 meters north-east of the Gregory River-1 well, drilled in 1966 by Shell Development Australia. Gregory River-1, drilled using an overbalanced mud system, established the presence of gas with a Drill Stem Test flow rate of 200,000 standard cubic feet/day recorded from the Gregory Sandstone. Gregory River-3 will be a twin of the original 1966 well, however it will be drilled using air as the drilling fluid rather than conventional mud, thus limiting the possible damage to the reservoir section and optimizing the potential gas flow.

The Maryborough Basin is strategically located on the Queensland coast mid-way between the densely populated and industrialized South East Queensland region centered on Brisbane and the industrial centre of Gladstone to the north. Currently, gas is supplied into Brisbane from fields in the Surat and Cooper Basins in southwest Queensland via the Ballera-Roma-Brisbane pipeline and into Gladstone principally from gas fields in the Denison Tough and coal seam gas production from the Central Queensland coalfields of the Bowen Basin. Gas discoveries in the Maryborough Basin, because of its strategic location, will be able to compete favourably with conventional gas and coal seam gas in the major east coast markets. It is anticipated that the well will take some 21 days to drill to total depth.

Participants in the Gregory River-3 well are: Magellan Petroleum is the operator with 48%; Novus holds a 50% interest and QGAS holds the remaining 2%.