Industry News - E&P Hotline - Offshore Australia Longtom-4 development well spuds on ACOR's ORRI Offshore Australia Longtom-4 development well spuds on ACOR's ORRI
by: OilOnline
Friday, June 27, 2008
Australian-Canadian Oil Royalties Ltd. (ACOR) announced that Nexus Energy Limited, the operator of VIC/P54 including the production license VIC/L29 advises that the development well Longtom-4 in the Gippsland Basin offshore Australia, has spudded using the West Triton jack-up drilling rig.
ACOR owns a 1/20th of 1% ORRI under VIC/P54 (VIC/L29).
The Longtom-4 well is expected to take approximately seven weeks to drill the pilot hole and then complete the horizontal production section of the well. The horizontal section will be drilled to intersect the two deepest sands within the Longtom field, as indicated on the schematic cross section below.
Longtom-4 is the second development well for the Longtom gas project. The Longtom-3 well, drilled during the third quarter of 2006, is ready for commercial production with no further rig intervention required.
The flow capacity of Longtom-3 alone is expected to be sufficient to supply the anticipated maximum contract rate requirements for the Longtom field on ACOR’s ORRI.
Timing of a planned third development well will depend on the results of Longtom-4 and the field’s production performance over time. The current plan assumes this well will be drilled two to three years after project start-up.
Gas produced from the Longtom wells will enter a new 12 inch pipeline and will be transported from the field to the end of Santos’ existing Patricia-Baleen pipeline, 11.8 miles away. Nexus will construct this pipeline and the associated control lines and equipment.
The raw gas will then continue along the Patricia-Baleen pipeline to shore where it will be processed at Santos’ existing onshore gas plant. Santos will install new equipment at the plant capable of processing the Longtom gas. This will primarily involve facilities for the stripping of condensate from the gas and the subsequent stabilization, storage and export of the condensate.
About VIC/P54 (VIC/L29)
The Longtom gas field development has been given the green light by the operator based on booked 2P reserves of 58,000,000 barrels of oil equivalent, with the Longtom-3 well alone being able to supply the full contracted amount of 11,000 barrels of oil equivalent per day, or a total of 350 Billion Cubic Feet of gas to Santos from Q1 2009 when first gas is due to flow.
The Longtom-3 well was a make or break well for the future of the field, drilled in Aug 2006, and sole risked in a bold move by the operator after regular permit partner Apache declined involvement. The well reached a total measured depth of 15,341 feet in late Aug 06, having intersected a total of 3,379 feet of gross gas sand in the Admiral formation which were deemed to be in connection with those at the Longtom-2 well based on pressure data.
The first production test over the upper sands (the “400 sands”) flowed at 23,000,000 cubic feet per day through a 1” choke in early September, but only a week later, that result had been blown out of the water. The lower sands of the Admiral Formation (“100, 200 & 300 sands”) flowed on test at an estimated rate of 77,000,000 cubic feet per day through a 1-¼” choke, with the maximum rate achieved using the separator being 59,000,000 cubic feet per day through a 60/64” choke, although rates were limited by equipment capacity.
The operator has booked 2P reserves of approximately 323 Billion Cubic Feet of gas and 4,000,000 barrels of condensate in Apr 2007 and considered the Longtom Gas Field as sufficient enough gas reserves to proceed with the development of the field.
About The Gippsland Basin:
In excess of 4 billion barrels of oil/condensate and 12 TCF gas reserves have been discovered in the Basin since exploration drilling began in 1964, with remaining reserves estimated at 600 million barrels of oil and 5 trillion cubic feet of gas. Current production of the basin is around 140,000 barrels per day of crude and 570 million cubic feet per day of gas. At peak rates, the Gippsland Basin can deliver more than 1,000 million cubic feet a day.
Some of the very best oil production in the world is found in the Gippsland Basin. Take for example, the Halibut Oil Field. The average well in the Halibut Oil Field has produced 60,000,000 barrels of oil per well or $8,200,000,000 worth of oil per well, at current crude market prices.
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