(MENAFN - ProactiveInvestors - Australia) Key Petroleum (ASX: KEY) and Empire Oil & Gas (ASX: EGO) plan to carry out flow tests over the Cattamarra Coal Measures carbonaceous shale interval at the upcoming Waugh-1 well in EP 437.
The joint venture will drill through the sequence and conduct three to four dedicated flow tests where elevated methane levels were encountered at the Dunnart-1 well.
Waugh-1, which is located updip of Dunnart-1, will then be drilled into the Bookara Sandstone where an open hole drill stem test will be carried out to evaluate whether the oil bearing Bookara Sandstone contain moveable oil.
The well is expected to spud in late 2012 or early 2013.
If oil is recovered to surface, a core will be cut from the bottom of the tested Bookara Sandstone interval through to the basement in order to better understand this play type.
Waugh-1 targets a fault dependent closure estimated at having potential recoverable oil of up to 5 million barrels of oil. Any unconventional gas discovery could be sold into the existing infrastructure located close by at the Dongara Gas Field or could be used to power oilfield facilities at Waugh-1 in the event of an oil discovery or any other oil discoveries in EP 437.
"Waugh-1 will evaluate some play types that we have been evaluating and developing since the changes have occurred at the head of the selection panel," Key managing director Kane Marshall said.
Key's technical team has identified that both conventional and unconventional pay has been missed in the Dunnart-1 well, drilled by the previous operator.
An estimated section of 10 metres to 15 metres of carbonaceous shale and interbedded sands within the Cattamarra Coal measures contained readings of both methane and ethane with anomalous methane level readings up to 200 parts per million.
Key and Empire also interpreted that an induction resistivity log was used incorrectly by the previous operator to calculate oil saturations within the Bookara Sandstone at Dunnart-1.
This well log is typically not used to evaluate for the presence of hydrocarbons in water based muds and a review of the well data indicates that 5 metres of net oil pay within the Bookara sandstone sequence was encountered in Dunnart-1.
However, mudlogs indicated that oil shows were encountered right through the Bookara Sandstone sequence, indicating potential for a much larger pay interval.
Empire is currently negotiating a rig slot to drill the well with the DCA Rig 7 depending on approvals from the Western Australia State Government.
Key and Empire both hold 50% of EP 437 with Empire acting as the operator.
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