Well Arrowsmith 2 should start drilling next week if the driller...

Well Arrowsmith 2 should start drilling next week if the driller keeps to his schedule. Thought I would just look ahead of what can be expected in drilling in the next few months and what information the recent US report on shale Gas might have relating to the Perth Basin:

1. Arrowsmith-2 - Extensive coring program planned

2. Fracture stimulation planned for September quarter at WoodadaDeep and Arrowsmith:

- WoodadaDeep (AWE 100%) planning progressed..3 zone stimulation planned with microseismicprogram to assist in mapping fracture density;

-Arrowsmith-2 well (AWE 44.25%) stimulation and flow testing in September quarter..5 zone stimulation being designed;

Tight Gas:

- Corybas-1 currently flowing 1.3 mmcfgd;

- Senecio-1 and -2 tested gas from Dongara/ Waginareservoir at rates of over 2.5 mmcfgd, but proved tight;

Activity planned includes re-entry and fracture stimulation, expected in Sept. quarter
- If successful, Seneciocould add up to 100 Bcfgross recoverable gas;
- Corybas development of up to 40 Bcfrecoverable gas in planning;

EIA's "World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States" report released in April.

Interesting Extracts from the report:

Page 2-2 :

Preliminary geological and reservoir data are assembled for each major shale formation,
including the following key items:
- Depositional environnent of shale (marine vs non-marine)
- Depth (to top and base of shale interval)
- Structure, including major faults
- Gross shale interval
- Organically-rich gross and net shale thickness
- Total organic content (TOC, by wt.)
- Thermal maturity (Ro)

These geologic and reservoir properties are used to provide a first order overview of the geologic characteristics of the major shale gas formations and to help select the shale gas formations deemed worthy of more intensive assessment

Depositional Environment. An important criterion is the depositional environment of the shale, particularly whether it is marine or non-marine. Marine-deposited shales tend to have lower clay content and tend to be high in brittle minerals such as quartz, feldspar and carbonates. Brittle shales respond favorably to hydraulic stimulation. Shales deposited in non-marine settings (lacustrine, fluvial) tend to be higher in clay, more ductile and less responsive to hydraulic stimulation

Depth - The depth criterion for the prospective area is greater than 1,000 meters, but less than 5,000 meters (3,300 feet to 16,500 feet). Areas shallower than 1,000 meters have lower pressure and a lower gas concentration. In addition, shallow shale gas formations have risks of higher water content in their natural fracture systems. Areas deeper than 5,000 m have risks of reduced permeability and much higher drilling and development costs;

Total Organic Content (TOC) - In general, the TOC of prospective area needs to be equal to or greater than 2%. Organic materials such as microorganism fossils and plant matter provide the requisite carbon, oxygen and hydrogen atoms needed to create natural gas and oil. As such TOC is an important measure of the gas generation potential of a shale formation.

Thermal Maturity - Thermal maturity measures the degree to which a formation has been exposed to high heat needed to break down organic matter into hydrocarbons. The thermal maturity of the prospective area needs to have a Ro greater than 1.0%, with a second higher quality prospective area defined as having a Ro greater than 1.3%.

Page XIV-13 :

The Perth Basin is a petroleum producing region that extends on- and offshore in the southwest of Western Australia. It contains two main organic-rich shale formations with gas development potential: the Permian Carynginia and Triassic Kockatea shales, portions of which already produce oil and gas from conventional reservoirs.

The Perth Basin is a north-northwest trending half-graben with relatively simple structure that generally appears favorable for shale gas development.

ARI identified the prospective portions of the Beagle Ridge and Dandaragan Trough in the northern portion of the Perth basin, where the Carynginia and Kockatea Shale source rocks are thick, deep, and thermally mature. An estimated 2,180-mi2 area could be prospective for shale gas development, using standard minimum and maximum depths (6,000-16,500 ft) and vitrinite reflectance (Ro > 1.0%) cutoffs.

Completable shale intervals in the Permian Carynginia Shale have an estimated resource concentration of approximately 107 Bcf/mi risked completable gas in-place of 98 Tcf, and risked recoverable resources of approximately 29 Tcf. For the Triassic Kockatea Shale, the prospective area has 110 Bcf/mi2, risked completable gas in-place of 100 Tcf, and risked technically recoverable resources of approximately 30 Tcf.

Activity. In April 2010, AWE cut five cores in the 280-m thick shale in its Woodada Deep exploration well in the northern Perth Basin. The company found the upper and lower zones to have high clay content. However, the middle zone was considered more prospective, with lower clay (value not reported), 1-4% TOC, estimated 3-6% porosity, and depths of 1,600 to 3,200 m. AWE estimated a total 13 to 20 Tcf of gas in-place at its permit within the middle portion of the Carynginia Shale.

Source:
http://www.eia.gov/analysis/studies/worldshalegas/

An interesting read!

Regards

SP