Project Summary
PEL 107 forms the keystone area of Great Artesian’s oil exploration focus in the South Australian Cooper Basin. The Kiana-1 oil field discovery in late 2005 (GOG 30%) confirmed the prospectivity of this permit.
PEL 107 covers an area of 814 km2 (201,256 acres), encompassing the Lake Hope oil fields, which Primary Industry and Resources South Australia (PIRSA) estimates collectively contain some 30 million barrels of in-place oil, of which some 17 million barrels have so far been produced.
The oil field distribution implies that much of this permit has potentially been exposed to migrating oil. Previous exploration concentrated on the most conspicuous structural highs on which the majority of Lake Hope fields are located.
Historically the exploration drilling success rate in this area was 56% and Great Artesian (together with Beach) committed to a six well program guaranteed over three years. During 2005 Great Artesian, entered into a farmin agreement whereby Magellan Petroleum funded Great Artesian's share of the cost of drilling two exploration wells within PEL 107 in order to earn a 30% interest in any subsequent discovery. Of these two wells, Kiana-1 resulted in an oil flow of approximately 1100 barrels per day from the Patchawarra Formation. Following casing, this well flowed at rates of between 400 and 800 barrels per day before being put on Jet Pump in early 2006. Petroleum Production Licence 212 was granted.Total production exceeded 100,000 barrels before rising water levels reduced production to 100 bopd. Kiana-2, an appraisal well designed to investigate the potential extension of the oil field into a northwestern culmination failed to encounter productive reservoir sands. Great Artesian has a 30% interest in PPL 212.
During late 2006 and early 2007 four exploration wells were drilled in PEL 107. Keeley-1, Talia-1 and Cabbots-1 were each plugged and abandoned. Appadare-1 was then drilled to evaluate a potential combination stratigraphic- structural trap but was also plugged and abandoned. Great Artesian's share of the Appadare-1 well was funded by Rawson Resources Ltd. Magellan Petroleum funded Great Artesian's share of the Keeley-1, and Cabbots-1 well and earned a 20% interest in PEL 107. Outside of the Appadare Farmin Block, Great Artesian retains a 40% interest. Beach Petroleum, also with 40% interest, operates the permit on behalf of the various joint ventures.
Project Details
Great Artesian has identified over 30 undrilled targets within this Permit on the basis of pre-existing seismic data.
In September and October 2005 Kiana-1 and Tyringa-1 were drilled to test two relatively shallow structural targets located close to existing third-party oil fields. Of these wells Kiana-1 resulted in an oil and gas discovery. As announced on 26 July 2005 Great Artesian’s costs of drilling these wells were funded by Magellan Petroleum Limited (“Magellan”) under a farmin agreement, whereby Magellan would earn a 30% interest in any subsequent Petroleum Production Licence (PPL) in the event of a commercial discovery. If there are no discoveries Magellan earns no interest as a result of its partial funding of these two wells.
As announced to the ASX on 6 September 2005, Kiana 1 well resulted in an oil and gas discovery. Drill Stem Test #4, conducted over the interval 1939 to 1948 m, flowed gas at 2.8 million cubic feet per day with 1100 BOPD of 52 degree API oil, and no water, at a stabilized rate through a ½” choke. Initial clean up flow through cased hole suggested flow rates of more than 500 BOPD.
Details of production since the discovery are outlined below under the heading “PPL 212”. The Kiana-1 discovery opens up a potential new petroleum exploration “play” in that the producing horizons lie within the Permian portion of the geological section, much deeper than the Eromanga reservoirs which are the main producers of the surrounding Jack Lake Oil Fields. This implies that there may be potential for locating other deeper oil charged reservoirs skirting the flanks of existing oil fields within and surrounding PEL 107.