Everyone in oil and gas knows there is a lot of risk. No matter how high-tech the industry becomes, what lies beneath the surface is not truly known until wells are drilled. The proof can be seen in two recent stories out of Australia. Deep in the Outback, the first unconventional well to be tested in the Georgina Basin produced no hydrocarbons. The promise of that play was actually the subject of this blog, but things change and sometimes rapidly. So now, with the clock ticking, I’m turning my attention to an Australian well that yielded considerably more success.
The waters off the northwestern shoulder of Australia hold a lot of gas. The area, which has been exporting LNG since 1989, has two plants in operation and another three under construction. So when Apache farmed into the Phoenix South project in the Canning Basin in late 2013, the lure was a Triassic structural gas play. The resource was estimated at 5.5 Tcf of gas in place. But instead Apache found oil – perhaps as much as 300 million barrels, which makes it one of the largest if not the largest oil discovery in Australia in three decades. To put that in further perspective, oil prospects of 250 MMbo or larger are watched closely and with that high reward comes a lot of high risk. It is not uncommon for a year or two or three to go by with nary a discovery of this magnitude made anywhere on the planet.
The Phoenix South-1 well was drilled by the Atwood Eagle semisubmersible to a total depth of 4,540m in 133m of water. It encountered four oil columns ranging from 26 to 45m in the Triassic Lower Keraudren formation some 4,160 to 4,500m below sea level. Six light oil samples were recovered. The intervals intersected are relatively clean sands with porosities averaging 6 to 8% across a net pay interval of 66m over a maximum closure of 46 sq km. Partner Carnarvon Petroleum said it expects to know how much recoverable oil the discovery has in about three months. It was drilled WA-435-P some 180km north of Port Hedland in the state of Western Australia. Apache operates the block with a 40% interest, in addition to Carnarvon (20%), partners include Finder Exploration (20%) and JX Nippon (20%).
image source: https://carnarvon.com.au/?page_id=52
Not surprisingly, Apache has exercised its option to acquire a 40% interest in and operatorship of two additional adjacent permits (WA-436-P and WA-438-P) for a total leasehold of more than 20,000 sq km. The area includes a number of large, undrilled structures, including the Roc prospect on WA-437-P. One of the two structures that caught Apache’s eye, Roc will be drilled in 2015. It is believed to have a bigger reservoir and be larger in scale than Phoenix South.
No doubt the Canning Basin as a whole will be receiving renewed attention. Australia’s Woodside Energy is currently drilling a wildcat on WA-466-P, one in an eight-well drilling campaign that is likely to now be watched more closely. The Hannover South 1 well was spudded in late July 2014 by the Deepwater Millennium drillship in 821m of water. It is targeting a gas prospect at a proposed total depth of 5,583m. There are also a number of farm-in opportunities in the Canning Basin, albeit primarily onshore. Drillinginfo covers Australia out of its Singapore office, with Chester Chua managing the region.
What do you think? Leave a comment below.
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