Lakes Oil (“LKO”) advises that at 6:00 AM today the Trifon 2 well was at a depth of 1267 metres and running casing. The engineering design for the second stage of the well has now been completed. The procurement of the equipment, and special oil based drilling mud required to drill to the anticipated depth of 2500 metres is expected to take several weeks. Schlumberger Oil Field Services of Denver USA have completed a full assessment of the Trifon 2 logs and have identified the potential of a number of zones to produce gas after fracturing the formation. The best of these zones will be selected and fractured to hopefully produce gas to surface at commercial rates. It is now our intention to move the rig to the North Seaspray 3 site.
NORTH SEASPRAY 3 PEP 157, ONSHORE GIPPSLAND BASIN, VICTORIA North Seaspray 3 was original drilled in May 2000. It is planned to re-enter the original well and drill an additional 250 metres deepening the well to a total depth of 1450 metres and then using a coiled tubing unit to drill horizontally for approximately 300 metres under balanced through the Strzelecki Formation. This technique has been successfully used in other parts of Australia to lift gas production rates in difficult formations. On completion of North Seaspray 3 we will release the Hunt rig to Western Victoria where two wells are planned to be drilled by Essential Petroleum Resources.
WOMBAT 1 & WOMBAT 2 PEP 157, ONSHORE GIPPSLAND BASIN, VICTORIA After extensive assessment of these two wells by Halliburton in Denver USA it has been decided to reenter the wells, close off the open perforations and prepare the wells for large fracturing.
Initially one zone in each well will be fractured. The zone selected in Wombat 2 originally flowed 470,000 cubic feet of gas per day to surface and the zone selected in Wombat 1 has not previously been tested.
Studies completed in USA by Halliburton indicate the potential to increase the gas flow substantially through fracture stimulation in these wells.
Lakes is keen to prove the potential of both the Wombat wells and to complete this as quickly as possible. These activities will take place simultaneously as we move ahead with the Trifon Tight Gas Project.
KILLARNEY 1 PEP 152, ONSHORE OTWAY BASIN, VICTORIA Killarney 1 to be drilled in PEP 152 is a follow-up well to Port Fairy 1 drilled in 2002 which had gas and light liquid hydrocarbon recovery. Essential Petroleum Resources is the operator and are planning to drill this well in June. Lakes Oil holds a 15.59% interest in this permit and the remaining interest of 84.41% is held by Essential.
It is envisaged that the rig will return to Trifon 2 following Essential’s drilling program.
Yours sincerely LAKES OIL N.L.
Ace..
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