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Woodside Petroleum's second gas find boosts chances for Pluto expansion

UPDATE: Ross Kelly From: Dow Jones Newswires August 17, 2010
WOODSIDE Petroleum has reported its second gas discovery off the coast of Western Australia in as many days.

The find firms up its chances of sanctioning an expansion of the Pluto liquefied natural gas project by the end of 2010.

Shares in Woodside were up 26 cents, or 0.6 per cent, to $43.36 by early afternoon, outpacing a 0.3 per cent rise in the benchmark S&P/ASX 200 index.

Woodside said the Larsen Deep-1 well, owned in a joint venture with Hess Corp, has intersected gas columns of about 50 metres combined over several zones.

The well is at 4914 metres and is planned to drill down to 5030 metres, Woodside said.

The discovery is a lot smaller than the 185 metre continuous gas column Woodside encountered at the Alaris-1 well, reported yesterday, but it's much closer to the coast than Alaris-1 and within 9 kilometres of the previous Martell and Noblige discoveries.

EL&C Baillieu director Ivor Ries said the broker's initial analysis indicates the Noblige-Martell-Larsen structure has the potential to contain between 5.4 trillion and 6.8 trillion cubic feet of gas, more than enough to support a second LNG train at Pluto.

"These three discoveries, when coupled with maps of seismic data previously presented by Woodside, suggest that in the worst-case scenario Woodside has now proven a mid-sized gas/condensate field in the central zone -- and 90 kilometres from the main Pluto production platforms," Mr Ries said, noting that Woodside and Hess still have 16 more wells to drill.

A company spokesman declined to speculate on whether Larsen Deep-1 would become a production well. Wireline logging would be conducted on the discovery to obtain pressure and gas samples, Woodside said.

Companies as large as Woodside don't have to disclose bad exploration results, so they usually only tell investors about discoveries they believe are material.

An end-of-year final investment decision target for the onshore Pluto LNG processing plant's expansion to two production units was notably absent from Woodside's second quarter production report last month, following a few disappointing exploration results.

The company is expected to provide an update on the expansion when it releases its first half profit results tomorrow.

http://www.theaustralian.com.au/business/mining-energy/woodside-petroleums-second-gas-find-firms-chances-for-pluto-expansion/story-e6frg9ef-1225906349802