InterOil to Complete Elk-4 as Gas, Condensate Producer

InterOil Corporation has issued an operational update for its Elk prospect, located in the Eastern Papua Basin.

The Operator, InterOil's subsidiary, is currently preparing to complete Elk-4 as a gas and condensate producer. Additional testing across the total open hole interval will commence, following the setting of a 4 1/2 inch production string.

Wireline logging was performed over the entire open hole section from 7,205 feet (2,196 meters) to 7,815 feet (2,382 meters). Third party evaluation of the logs indicate gas pay down to 7,668 feet (2,337 meters). While drilling, the well had liquid hydrocarbon (oil/condensate) shows from 7,618 feet (2,322 meters) to 7,763 feet (2,366 meters) with losses experienced at 7,815 feet. This prevented drilling deeper as losses could not be controlled by reducing mud weight without causing kicks from gas zones higher in the 697 foot (185 meter) open hole interval. Since the last drilling report, DST#3 and DST#4 were performed.

Results of DST#3

DST#3 was performed over the open hole interval from 7,632 feet (2,326 meters) to 7,815 feet (2,382 meters). The preliminary test was limited to gas and formation water as the packer and test tools were lost in the lower section of the hole.

Activity Post DST#3

The well was sidetracked around the stuck packers and drilled to 7,628 feet (2,325 meters), and DST#4 was performed.

Results of DST#4

DST#4 was successfully performed from 7,546 feet (2,300 meters) to 7,628 feet (2,325 meters) to isolate and test a matrix porosity zone identified on the logs to determine the condensate volumes over the zone. A rate of 18 bbls/mmcf of condensate was produced. This represents a 13 bbls/mmcf increase in condensate over the Elk-1 well.

The calculated stabilized flow is the rate expected at the sandface of the reservoir if all the skin damage was removed and there were no tubular constraints. No formation water was observed during this test.

Preliminary Test Result Highlights:

  • Added 82 feet (25 meters) to the over all gas column since DST#2, for a total gas column of 541 feet (165 meters) in the Elk-4.
  • Lowest known gas at 7,668 feet (2,337 meters).
  • Total gas column between Elk-1 to Elk-4 is 2,028 feet (618 meters).
  • Condensate recovery increased 260% over Elk-1 to 18 bbls/mmcf.
  • Confirmed gas and condensate flow from matrix porosity. Final results will be provided once a full technical evaluation is completed.