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MEO Australia Limited(ASX:MEO)Seruway PSC - Gurame SE-1XST Progress Report No. 10  Join our daily free Newsletter

MENAFN - ABN Newswire - 11/11/2012

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(MENAFN - ABN Newswire)

MEO Australia Limited (ASX:MEO) (OTCQX:MEOAY) provides the following update in relation to Gurame SE-1XST being drilled in the Seruway PSC, offshore North Sumatra.

Since the last report, a conventional core was cut over a 13.4m interval from 2,794-2,807.4mMDRT at which point coring was terminated and 12.36m (92.2%) of core was recovered.

Drilling resumed in 8 1/2" hole until 2,821.8mMDRT where mud circulation was lost within the Baong sands. Following stabilization of mud losses, drilling continued to the planned section TD at 2,962mMDRT in the Lower Baong shale. Gas shows continued to be observed to section TD.

At 2400 hrs (Jakarta time) on 11th November, a suite of wireline logs was being acquired. The forward plan is to complete the wireline logging program, set a 7" liner prior to increasing mud weight and drilling ahead to the lower targets.

Progress Summary

Progress since last report:

- Cut 13.4m core from 2,794mMDRT, recovered 12.36m (92.2%)
- Drilled 8 1/2" hole to 2,821.8mMDRT - lost circulation in Baong sands, treated zone with LCM
- Drilled to planned section TD at 2,962mMDRT, commenced wireline logging program

Present Operation (at 2400hrs Jakarta time, 11th November)

- Acquiring wireline logs over first objective

Outlook:

- Complete wireline logging program and run 7" liner, prior to drilling ahead to lower targets

MEO's CEO and MD Jrgen Hendrich commented on the announcement:

"We are highly encouraged by the gas observed in the first of the primary objectives."

GURAME OVERVIEW, SERUWAY PSC, INDONESIA

The Gurame gas and oil field was discovered in 1968. The first well drilled on the field encountered hydrocarbons and experienced a loss of control (blowout) from the Baong Sandstone. Subsequent wells were drilled in a manner to prevent a recurrence of this unfortunate event. MEO's technical assessment is that the drilling practices employed may have compromised reservoir performance.

Although the blowout demonstrated both the presence of hydrocarbons and the ability of the reservoir to flow at high rates, high mud weights used in the subsequent wells at this time may have damaged the reservoir close to the well bore, leading to uncertainty about reservoir performance.

Formation Interval Tests (FITs) on these wells recovered both oil and gas low in CO2 from several intervals.

The FIT data and all other available other data was collated and evaluated by SOEL under the direction of MEO and resulted in the interpretation summarised in the simplified cross section (refer to link below).

Gurame SE-1X has been located near the crest of the closed structure which has been defined by modern 3D seismic data. A major objective of the well is to determine the performance capability of the Baong and Belumai reservoirs. Reservoir performance is likely to be enhanced by the expected development of natural fractures associated with the fold hinge adjacent to the crestal region of the structure. Drilling techniques will be employed to reduce the potential for formation damage.

MEO's internal resource assessment estimated the P50 recoverable resource of the Gurame field to be 0.5 Tcf of low CO2 gas and 57 mmbbl of liquids.

Figure 2. - Gurame Prospective Resource Assessment - MEO Preliminary Estimate

--------------------------------------------------------
Total Baong & Belumai Reservoirs Unit P90 P50 P10
Recoverable Hydrocarbon Gas Bscf 273 497 863
Recoverable Oil and Condensate MMstb 27 57 126
--------------------------------------------------------
Subject to success of the well, the Gurame discovery represents the most likely current candidate for early development. Initial studies of potential development plans for the P50 resources case have included both a gas only development to supply local regional gas demand and an oil development with future gas cap blowdown.

View the complete MEO Australia announcement including Figures at the link below:
http://media.abnnewswire.net/media/en/docs/ASX-MEO-382045.pdf


 






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