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West Oil crosses swords with petro giants

Junior oil and gas explorer West Oil NL has had a fillip to its strategy to exploit its extensive hydrocarbon ground in the Timor Sea.

While the company is in the right address, it is crossing swords with some of the world’s hydrocarbon heavyweights, and getting a foot in the door costs big bucks.

This includes giants like Phillips, Santos, Shell and Woodside, not to mention welterweights like Newfield Exploration Company, a Houston, Texas-based new operator and 50 per cent owner of the Jabiru and Challis oilfields.

Newfield recently agreed to acquire 250 square kilometres of 3D seismic over West Oil’s WA-284-P permit to earn an 85 per cent option. About forty to sixty kilometres to the north of this permit lies the Eland and giant US$1.4 billion Bayu-Undan gas/condensate fields.

Now West Oil is likely to further boost its prospects in the area with an agreement with AEC International, a subsidiary of Alberta Energy Com-pany, a Canadian independent oil and gas exploration and production company.

The transaction involves AECI drilling the Puffin-5 well in West Oil’s AC/P22 permit in the Timor Sea in March next year.

The first of West Oil’s boreholes in the area, Puffin-5 will be drilled on the Puffin-l Updip prospect which – if hydrocarbons are present – has potential recoverable reserves of 75 million barrels. AC/P22 also contains the Puffin 2 field. Puffin South and the new Sea-Eagle prospect, which have been recently identified by IKODA and West Oil from the Onnia 3D seismic survey, have combined potential recoverable reserves of over 100mmbo.

Under the agreement, AECI will earn 60 per cent and become the operator of AC/P22 by drilling Puffin-5. West Oil and its partner Norwest Energy NL will retain 20 per cent each in the permit and be free carried.

West Oil managing director Charles Morgan said that, together with the well to be drilled on Coleraine-1 in ZOCA 96-16 next year, the commitment to drill Puffin-5 had brought two of its major projects to the final stage of its exploration cycle.

“Our confidence in wells at Coleraine-l and Puffin-5 is increased by the technology we have used to identity the well locations and the fact that they are both updip oil columns in previous wells.” Mr Morgan said.

West Oil has mapped out a major exploration programme for 2000. Apart from the two wells, it is undertaking further mapping on the

Sea-Eagle prospect and interpreting 450sqkm of 3D seismic over AC/P28, while Newfield is interpreting the 3D seismic over West Oil’s WA-284-P before exercising its option to drill a well.

“The agreement with AECI is the realisation of the first phase of West Oil’s strategy of working up our extensive assets in the Timor Sea,” Mr Morgan said

“Our prize assets, Puffin-5 and Coleraine-l, have now been farmed out to major companies and we have new prospects coming through that we believe will be important additions to our portfolio.”

West Oil is the third largest net acreage holder in the Timor Sea after BHP and Shell.

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