Jeruk gushes up to the market's expectations
By Barry Fitzgerald
Resources Editor
September 9, 2005
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THE Jeruk oil discovery in Indonesia has finally produced the follow-up flow the market has been waiting on since the find was hailed as the biggest made by Santos at more than 170 million barrels.
Santos (45 per cent and operator) and the other partners, Singapore Petroleum (40 per cent) and Cue Petroleum 15 per cent) reported yesterday that the latest appraisal sidetrack drilled from the existing Jeruk-2 wellbore had flowed oil at a daily rate of 3000 barrels a day with gas.
The flow was less than half that achieved in a previous sidetrack (7488 barrels). Both flows were restricted because of the limitations of the surface equipment. The latest flow was further constrained by the use of a surface choke that was half the size of the one used in the earlier test.
The test has renewed confidence in the previous estimate by Santos that Jeruk is likely to be bigger than its pre-drill estimate of 170 million barrels, even if the flow rate is smaller. How much bigger remains subject to the drilling of four appraisal wells (Jeruk 3-6) later this year.
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AdvertisementThe well positions will be fixed once interpretation of three-dimensional seismic tests is completed. Unlike Jeruk-2, which is close to Jeruk-1, the appraisal wells will be spread far and wide on the Jeruk structure. Early enthusiasm for Jeruk-2 results had some in the market suggesting it could be a 500 million barrel find.
But Santos has indicated that any upgrade to its estimates will have to wait until the results of Jeruk 3-6 are in. The market is also waiting on results from the Caldita-1 wildcat exploration well in the Timor Sea, 275 kilometres north of Darwin.
There has been speculation that Caldita is a big gas discovery that Santos would be looking to include in an expansion of the Bayu-Undan liquefied natural gas project near Darwin. But in yesterday's drilling report, the only news was that the well was at a final depth of 4037 metres and that a 179mm liner was being run. Santos shares closed 24¢, or 2.1 per cent, higher at $11.19. Cue shares were 1.5¢, or 5.4 per cent, higher at 29¢.
The reporter owns Santos shares.
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