ARC Energy NL is focussing its full attention on the Dongara gas field, where it has undertaken a detailed technical review and a series of well workovers to increase both the reserve base and well output.
During the March quarter, the company also tested the Elegans prospect and pursued ongoing gas marketing efforts.
Significant milestones were achieved with the completion of an agreement for the exploitation of the oil reserves of the Dongara field – located 360 kilometres north of Perth – and drilling of the company’s first exploration well in the nearby L1 and L2 licence areas.
The Elegans exploration well was completed with an initial gas flow of 1.2 million cubic feet per day.
The well will be connected to the gas processing plant using the existing flow line and production tested to ascertain reserves and long term deliverability.
Although this gas flow is at the low end of expectations, the well has proved up a large gas resource and ways to commercialise this resource are being investigated.
ARC and Amalgamated Scottish Oil Ltd (Amsol) have agreed to proceed with evaluation of the oil reserves of the Dongara field, in which the oil reserves represent a large in-place resource of more than 100 million barrels of oil, of which only 1.1 million barrels have been recovered to date.
It is anticipated that the modern drilling and production techniques to be applied by Amsol will allow recovery of an additional amount of these reserves with the first well in the programme planned to be drilled in August this year.
“This program is a very significant step forward for the addition of value to the Dongara field,” ARC managing director Eric Streitberg said.
The company has also acquired 82 kilometres of Hakea seismic over the three best defined gas exploration prospects.
Mr Streitberg said the timing of the drilling of further gas exploration wells will be dictated by both the success of gas marketing efforts and the potential for new sales contracts, and the availability of drilling rigs.
The recent resurgence in the oil price has also refocussed attention on the oil prospects to the east of Dongara and the most effective way of testing these will be reviewed during the next quarter.
Gas sales from the Dongara field were some 499 terajoules during the quarter.
