Otway Basin (PEL 82)
The PEL 82 exploration licence (“PEL 82”) (wholly owned by President Petroleum) is an onshore coastal licence in the Otway Basin in South Australia.
In April 2011, President completed drilling on The Northumberland 2 exploration well, to a measured depth of 3,427 metres with the primary target reservoir, the Waarre sands, extending even deeper beyond this point. The well was drilled to schedule and budget and extensive logging has now been completed, including a drill stem test over a 30 metre section.
Whilst wire-line logs and the results of the drill stem test did not indicate moveable hydrocarbons in commercial amounts the evidence points to considerable quantities of condensate and gas having migrated through the very thick Waarre sandstones.
Although hydrocarbons have not been trapped at the well location because of thinner than forecast seal and a possible leak window to the next fault block, importantly the presence of a top seal to the Waarre sands being Belfast mudstone has been confirmed. No material Flaxman sands were identified in the well.
The results of this well show evidence of hydrocarbons from core samples and logs, and the materially deeper than expected Waarre sands are very encouraging. This points to significantly greater potential for economic gas condensate and/or oil to be preserved, and in greater volumes than previously projected in many other structures within the PEL 82 licence, where fault movement is less or the seal thicker. Indeed structures in the north of the licence have yet to be covered by a higher resolution 3D seismic. Prospective resources for the PEL 82 licence remain similar to the previously estimated 430mmbbls of oil or 630Bcf of gas, due to the materially thicker sands.
President have identified a number of potential hydrocarbon bearing structures and by way of example the first location to which President is applying the learnings so far obtained, albeit originally a relatively small structure, on current information has benefited from an over 50% increase in volumes of recoverable hydrocarbons.
Accordingly as there has now been a substantial de-risking by the confirmation of charging of a potentially thick reservoir, President is now addressing the other risk as to sealing and detailed work will now be carried out to identify areas for further work both seismic and drilling.