Stuart Expands Cooper/Eromanga Acreage More Than 80%
Stuart Petroleum was awarded a highly prospective new petroleum block -- designated CO2009-E -- in the South Australian sector of the Cooper/Eromanga petroleum province. When granted, the new license will provide Stuart with outstanding coverage of the prospective and productive southern reaches of the Cooper Basin in South Australia, a region where Stuart already has 6 oilfields in production. Stuart's exploration group used its intimate knowledge of the region in its approach to Government for the area which is an excellent compliment for Stuart's Exploration and Development skills.
The new Block will increase Stuart's already strong Cooper/Eromanga acreage position by 83%. The initial licence term will be 5 years with a right of renewal permitting a total 10 year exploration term. Long term Production Licences will be issued for discoveries.
Stuart will hold 100% interest in its new acreage and plans to drill 4 exploration wells in the first license year and 3 exploration wells in the second year. At the same time it will acquire new 2D and 3D seismic to upgrade numerous leads evident in the region.
Key early targets include:
- The Kobari Oilfield, discovered by Delhi Petroleum and partners in 1984, is planned to be redrilled early in the first year of the license term. The discovery well, Kobari 1, flowed oil on test from the Jurassic Murta Member at a rate of 53 barrels of oil per day but the field was not brought into production. Subsequent 3D seismic acquisition has revealed that Kobari 1 was drilled on the flank of the Kobari closure. Stuart is confident that a drill test of the crest of the structure will delineate new resources of producible oil. At this stage of mapping P10 oil in place in the Kobari structure is estimated to exceed 1.0 million barrels.
- The Kerinna oilfield is planned to be redrilled early in the first license year. This field was discovered by Delhi and partners in 1984 and Kerinna 1 produced approximately 20,000 barrels of oil from the Jurassic Hutton Formation. Stuart believes that shows of oil in the Murta and McKinlay Formations at Kerinna may also be producible from the structure. At this stage of mapping, P10 oil in place in the Kerinna structure is estimated at approximately 1.0 million barrels.
With 6 producing oilfields in the district, Stuart's existing infrastructure and expertise in the ground is expected to ensure that the Company is able to maintain its record of bringing new oil discoveries on stream within weeks of their discovery.
The Cooper Basin is the most prolific onshore gas-producing basin in Australia and the new acreage advances Stuart's plan to target gas in both conventional (sandstone) and unconventional (shale, coal and tight sandstone) reservoirs. The Cooper Basin is connected by pipeline to markets in each of the eastern and southern capital cities and to numerous regional and industrial centers. Other Cooper Basin producers have recently announced programs to vigorously target both the Basin’s conventional and unconventional gas resources to meet expected increases in demand for gas.
Together with Stuart's existing licenses, the new acreage provides extensive updip cover of the southern margin of the gas-prone Nappamerri and Allunga Troughs, surrounding the Santos operated Della gas field. Stuart now has a strong acreage position for gas throughout this productive and highly prospective region. Stuart's gas program will be based on the use of enhanced seismic processing
techniques to identify both conventional and unconventional gas targets and the use of fracture stimulation production enhancement techniques and high angle drilling to maximize production rates and recoveries.
Managing Director of Stuart Petroleum, Tino Guglielmo, said, "The addition of the new Cooper Basin acreage increases Stuart's holding to
over 5,700 km2 of Cooper and Eromanga Basin ground -- one of the larger and more valuable holdings in the Basin and one from which Stuart Petroleum is well set up to explore, develop and produce.
"With the sale of our Timor Sea interests due to settle shortly, Stuart will be substantially debt-free, with a strong cash flow from its Cooper Basin holdings and with an excellent portfolio of Cooper/Eromanga Basin exploration targets. Stuart is in its most robust good health ever, in terms of its financial position, cashflow, reserves and exploration portfolio. This healthy state of affairs has been achieved without a share issue since the Company's initial offering as Stuart Petroleum in 1999. All growth since that time has been generated by good oilfield practice.
"Stuart Petroleum continues to plan for organic growth rather than growth funded by shareholder subscription. Stuart has paid annual dividends on four occasions since 1999 and, as announced by the Chairman at this year's Annual General Meeting, the board will consider resumption of the annual dividend payments in recognition of the Company's substantial achievements this year in both the Timor Sea and the Cooper Basin."