Summary
Great Artesian first produced oil from its Kiana oilfield in November 2005, and from its Smegsy gasfield in March 2006.
Smegsy production has since ceased due to water ingress and the company and its partners are examining options to begin gas production from a series of gas/condensate discoveries made in its PEL 106 area at Middleton-1, Nutmeg-1, Paranta-1, Rossco-1, Smegsy-1, and Cadenza-1.
PPL 212 Kiana Oil Field
Kiana-1 was the company’s first producing oil well, with initial production commencing in November 2005 during a production test. The Kiana Joint Venture, comprising Beach (Operator with 40% interest), Great Artesian (30%), and Magellan (30%) was granted a production licence, PPL 212, to produce oil from the Kiana-1 discovery in January 2006. First revenue was received by Great Artesian in January 2006.
During the initial production testing a stabilised oil flow rate of 400 barrels per day was recorded. This flow rate continued into early 2006, producing some 25,000 barrels of oil. As the flow pressure reduced, a second oil zone was perforated and production co-mingled to give a daily free-flow production of around 800 barrels of oil.
By the beginning of 2007, a total of over 100,000 barrels had been produced. Currently the field operates with the aid of a jet-pump due to reservoir pressure decline. The Joint Venture continues to evaluate enhancement options for the oilfield, which it believes will result in higher flow rates and ultimate oil recoveries.
The Kiana Joint Venture has surface facilities of two 880 barrel capacity oil storage tanks, a gas-liquid separator, flow lines and up-take connections for loading oil into road tankers that transport the oil to Moomba (see Picture Gallery). The crude is sold to the SA Cooper Basin Producers who take delivery at Moomba, some 50 km to the east. Under the Joint Venture crude oil sales agreement the SACBP pays according to current market value based on Tapis light crude pricing.
Gas Plant Proposal
In August 2007 Beach Petroleum Limited has joined Great Artesian and Cool Energy to investigate the potential to build a gas processing plant and associated infrastructure in PEL 106 that would enable us to initiate production from our Cooper Basin gasfields.
It would be the first commercial scale use of Cool Energy’s CryoCell® cryogenic gas processing technology to capture and allow cost effective storage of carbon dioxide (CO2). This would enable efficient carbon geo-sequestration, not only providing a ‘clean’ product but also potentially realising a value for carbon capture of CO2 contained in Cooper Basin natural gas.
The initial feasibility study by our consultants indicates the plant is economically viable and further studies are underway. It is possible a plant could be operating in 2009, Great Artesian’s managing director, Andy Carroll believes.
Subject to results of the detailed studies and adequacy of gas reserves, the three companies will consider building a 20 million standard cubic feet of gas per day (20 mmscfd) processing plant, which would produce sales gas, LPG and condensate for supply direct to the Sydney or Adelaide markets, as well as liquid CO2 that can be stored underground (geo-sequestration).
Cool Energy’s technology has been proven in field trials over the past two years at ARC Energy’s Xyris Gas Field in the Perth Basin in WA. Early laboratory work to develop the process at WA’s Curtin University of Technology was backed by Shell, which is now a shareholder in Cool Energy. Woodside Petroleum also has been involved in the field trials.
Cool Energy managing director, Jessie Inman, believes this technology provides a strategic advantage for Australia to reduce CO2 emissions and ultimately gives natural gas very strong ‘green’ credentials in a decarbonised energy future.
Great Artesian and Beach Petroleum are joint venture partners in the Middleton-1 well that achieved a record gas flow rate of 11 mmscfd last year, and in the Udacha-1 gas discovery. The two companies would aim to be founding contributors of raw gas feedstock, possibly allowing other producers to toll their gas through the plant. The two companies are also joint venture partners (GAOG 60%, Beach Petroleum 40%) in the adjacent PEL 91, where they intend to drill two wells by the end of 2007.
Beach Petroleum is the Operator in the Beach Farmin Block in PEL 106 that was part of the recent Spinel 3D seismic survey. Beach has an option to drill two more wells prior to April 2008 to earn 50% in the Beach Farmin Block.
Great Artesian is the operator of the rest of the PEL 106 area where there have been six gas discoveries that now await development. The plant would enhance the life expectancy and economic viability of each field and benefit future discoveries in the area.