Shares in specialist drilling company Coretrack have surged more than 30 per cent after the company announced it had secured a commercial drilling contract with Woodside.
Shares in specialist drilling company Coretrack have surged more than 30 per cent after the company announced it had secured a commercial drilling contract with Woodside.
Coretrack's wholly owned subsidiary Globe Drill will use its powerful GT3000 drill rig to drill a shallow but unusually large 1.7 metre diameter drill hole in Karratha.
In a statement to the Australian Securities Exchange, Coretrack said the drill was the only rig available in Australia that was powerful and manoeuvrable enough to drill the hole.
The rid will be mobilised away from the Merredin test hole as soon as a low loader has been secured to transport it to Karratha.
"There are a number of unique aspects to our GT3000 and the capacity to drill very large diameter holes is one of them," said Globe Drill general manager Warren Strange.
"The rig is also fast and easy to mobilise and can drill multiple drill holes without too much additional cost and these aspects ultimately ensured that our rig was the obvious choice for the Woodside contract," he said.
Coretrack shares jumped 32.26 per cent on news of the contract closing up 5 cents at 20.5 cents.
See company statement below:
Coretrack Limited (ASX Code: CKK) is pleased to announce that its wholly owned subsidiary, Globe Drill Pty Ltd ("Globe Drill"), has successfully secured a commercial drilling contract with Woodside, requiring it to drill a shallow but unusually large 1.7 metre diameter drill hole in Karratha, Western Australia. The powerful GT3000 drill rig, being the only rig available in Australia powerful enough and manoeuvrable enough to drill this hole, will be mobilised away from the Merredin test hole to provide Woodside with this valuable service as soon as a low loader has been secured to transport it to Karratha.
Globe Drill General Manager, Mr Warren Strange, said "There are a number of unique aspects to our GT3000 and the capacity to drill very large diameter holes is one of them. The rig is also fast and easy to mobilise and can drill multiple drill holes without too much additional cost and these aspects ultimately ensured that our rig was the obvious choice for the Woodside contract".
"Mobilisation costs alone for large oil and gas style rigs can be in the millions, significantly adding to the cost of each hole. The GT3000 can be transported on the back of a low loader with minimum effort and only needs a handful of support trailers, significantly lowering the cost of each hole. Importantly and uniquely, we can penetrate quickly through hard rock using our air hammer and then switch to conventional mud rotary drilling when ground conditions demand it. Other oil and gas style rigs do not have the option to use an air hammer as they are generally only set up for mud rotary drilling" said Mr Strange.
Globe Drill has now undertaken a number of preliminary discussions with oil and gas and geothermal companies with a view to undertaking commercial contracts for them. To this end, the Company has appointed a General Manager - Commercial Contracts (see below).
Merredin Test Hole
Test drilling at the Merredin test site will be placed on standby while the Company undertakes the Woodside commercial contract.
The Company is pleased to confirm that, to date, the outcomes of the Merredin test hole in respect of bit wear have been much better than expected. For example, the last bit change interval achieved was 134 metres, using the Numa 6 inch PCD/Tungsten combination drill bit, a vast improvement on rotary bit life which has previously been below 20 metres in similar granite conditions. To put this in a financial perspective, some of the rotary bits trialled in Australia have cost more than $50,000 each. Based on these results, the bit life achieved by the GT3000 and the air hammer technology Globe Drill is developing would represent a saving of over 170 bits (which can cost up to $50,000 each) to drill a 4,000 metre hole, over 2,000 hours of bit change tripping time and over 800,000 litres of diesel. These savings are achieved just on bit change costs.
Based on feedback obtained to date from the Merredin test hole, which has involved drilling through enormously abrasive granite, Globe Drill has ordered a number of new Numa drill bits that have been specially designed to provide even longer bit life. The Company is confident of achieving bit change intervals of over 300 metres (currently up to 134 metres) with some minor design changes, and as much as 1,000 metres when drilling through less abrasive volcanic and sediments, where most of the current geothermal drilling requirements occur.
Penetration rates of the GT3000 have also been a major achievement, with penetration of up to 40 metres per hour at Merredin where mud rotary methods (used by oil and gas rigs) would not achieve more than 2 metres per hour in hard granite.
"Once you understand the achievements and the potentially huge savings over mud rotary methods, you can start to understand why geothermal and oil and gas companies in Australia are welcoming the new technology from Globe Drill. The rig has continued to perform extremely well, with all systems tested so far performing at or above expectations. Fuel usage has been lower than anticipated and both the pull back and rotation have delivered amazing performance levels, demonstrating clearly that depths of between 3000m and 4,000m can easily be achieved with a wide range of bit sizes and drill pipe options" said Mr Strange. With the geothermal industry reeling from the fact that it has been costing in excess of $15 million to complete a single 4000 metre hole (record low cost in soft ground where only 4 bit changes were required) with a large oil and gas platform style rig, the GT3000 concept was a very popular attraction at the recent Geothermal conference in Adelaide.
Appointment of General Manager - Commercial Contracts
Finally, the Company is pleased to advise that it has appointed Mr Greg Holmsen as General Manager - Commercial Contracts, effective 1 December 2010. As part of Mr Holmsen's remuneration package, the Company has agreed, subject to satisfactory completion of a three month probationary period, to issue to Mr Holmsen, for nil consideration, 350,000 unlisted options, exercisable at 25 cents each on or before the date that is two years from date of issue. The options are expected to be issued on 1 March 2011 and will not be subject to shareholder approval.
