Australia: Central Petroleum secures rig to commence 2011 drilling programme.
17 Oct 2011
Central Petroleum has issued a Letter of Intent (LOI) to Hunt Energy and Mineral Co. Australia, notifying the Company’s intent to engage Hunt to provide Hunt Rig 3 for the intended drilling of up to 3 wells, the Surprise-1 re-entry, Madiganor Simpson East and Mt Kitty in a liquids focussed drilling programme on Central’s acreage position in central Australia. The drilling rig and associated equipment is planned to commence mobilising to the site by 24 October 2011 and be ready for the re-entry of Surprise-1 in the first week in November.
The Company plans to complete the drilling and testing of Surprise-1 by about the first week of December. The Company has completed the renewal of access roads, the airstrip, the drilling pad and sump and has most of the required casing and hardware on hand. In accordance with the Northern Territory Department of Resources, (DOR) regulations, the well has been renamed Surprise-1 Sidetrack-1 (S1ST1) in recognition of the plan to sidetrack to one side of the lower part of the existing well bore to get fresh reservoir through existing oil shows for testing and evaluation. Following the rig incident in December 2011, the well bore through various promising oil shows has been exposed to slightly overweight mud for approximately 10 months to date which would undoubtedly have caused formation damage.
Under the terms of the forthcoming contract, Hunt Rig 3 is expected to be stacked in Central’s warehouse and yard facilities at Alice Springs during any break in drilling occasioned by the wet season. Hunt Rig 3 has been extensively refurbished with new or upgraded main motors, rotary table, mud tanks, Blow Out Preventer (BOP) and mud pumps. Most of the independent certification of the rig and its components has been completed but Central will be commissioning further independent checks to ensure full compliance with the Company’s comprehensive Health Safety and Environment (HSE) policies and procedures.
The Company Managing Director, John Heugh, said today 'The situation in Australia is very tight for drilling rigs and associated equipment and even tighter in central Australia and this has substantially hampered our plans to begin drilling again this year. Contrary to some market beliefs, the Company has not been sitting on the fence waiting for groups such as Petrofrontier or Rodinia to announce drilling results in neighbouring ground. There is no reason for the Company to have delayed drilling other than a profound shortage of appropriate drilling rigs.'
Central has previously reported independent estimates provided by RPS Energy, subject to confirmation of visual hydrocarbon saturation by electric logging, pressure data and flow testing, that one 9m zone alone in the already drilled section of Surprise-1 has the ability to flow at between c.500 to c.1,000 barrels per day. Surprise-1 has not yet drilled into the main target zone, the Pacoota Sandstone and there are other potential Direct Hydrocarbon Indicators throughout the Pacoota Sandstone. Two additional oil shows in the Lower Stairway Sandstone above the 9m cored zone remain unevaluated other than in visual inspection of cuttings.
The Company has previously referred in public announcements to its provisional future plans to purchase a modern state of the art drilling rig. 'Such a rig should be capable of drilling to a vertical depth in excess of 3,000m with at least a 1,000m horizontal section for anticipated unconventional drilling programmes' said Mr Heugh 'and as the rig would be based in Alice Springs, such a plan would result in considerable savings on mobilising and demobilising into and out of central Australia.' It is anticipated that any drilling rig purchased by the Company would be crewed by contract personnel via established drilling contractors or service companies and not directly by Central Petroleum Limited. Mobilisation and demobilisation of a drilling rig into and out of central Australia originating from other operational areas such as the Cooper Basin or the Surat basin can cost the Company a total of some $1-2.5 million dollars each way, ie $2-5 million dollars in total for each drilling campaign.
Central has ceased negotiations with Australian Drilling Services Pty Ltd for the provision of their Rig 6 and anticipates signing a formal contract with Hunt within a week.
The Company Managing Director, John Heugh, said today 'The situation in Australia is very tight for drilling rigs and associated equipment and even tighter in central Australia and this has substantially hampered our plans to begin drilling again this year. Contrary to some market beliefs, the Company has not been sitting on the fence waiting for groups such as Petrofrontier or Rodinia to announce drilling results in neighbouring ground. There is no reason for the Company to have delayed drilling other than a profound shortage of appropriate drilling rigs.'
Central has previously reported independent estimates provided by RPS Energy, subject to confirmation of visual hydrocarbon saturation by electric logging, pressure data and flow testing, that one 9m zone alone in the already drilled section of Surprise-1 has the ability to flow at between c.500 to c.1,000 barrels per day. Surprise-1 has not yet drilled into the main target zone, the Pacoota Sandstone and there are other potential Direct Hydrocarbon Indicators throughout the Pacoota Sandstone. Two additional oil shows in the Lower Stairway Sandstone above the 9m cored zone remain unevaluated other than in visual inspection of cuttings.
The Company has previously referred in public announcements to its provisional future plans to purchase a modern state of the art drilling rig. 'Such a rig should be capable of drilling to a vertical depth in excess of 3,000m with at least a 1,000m horizontal section for anticipated unconventional drilling programmes' said Mr Heugh 'and as the rig would be based in Alice Springs, such a plan would result in considerable savings on mobilising and demobilising into and out of central Australia.' It is anticipated that any drilling rig purchased by the Company would be crewed by contract personnel via established drilling contractors or service companies and not directly by Central Petroleum Limited. Mobilisation and demobilisation of a drilling rig into and out of central Australia originating from other operational areas such as the Cooper Basin or the Surat basin can cost the Company a total of some $1-2.5 million dollars each way, ie $2-5 million dollars in total for each drilling campaign.
Central has ceased negotiations with Australian Drilling Services Pty Ltd for the provision of their Rig 6 and anticipates signing a formal contract with Hunt within a week.
Source: Central Petroleum
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