looks sgood - operations update ASX ANNOUNCEMENT – 11 March...

looks sgood - operations update ASX ANNOUNCEMENT – 11 March 2005
Weekly Operations Update
T
he Directors of Arrow Energy NL [Arrow] advise the following operations update.
PL 194 – Kogan North Development (Arrow 50%, CS Energy 50%)
The Kogan North CSG Project is located in the Surat Basin approximately 40 km west of the
township of Dalby in Queensland.
Two drilling rigs are now on site at Kogan North as development drilling on the field ramps
up. To date 5 holes have been drilled to surface casing point, and casing set just above the
production interval. One of these wells is now being drilled out to total depth while a sixth well
has been spudded using the second rig. It is anticipated that the first 3 wells will be brought
on to production in early April to begin the dewatering process.
Construction of the gas and water gathering systems has begun with clearing of main trunk
lines and pipe layout progressing satisfactorily.
First sales gas from the field is expected in September this year.
The development of this 30-35 well project will be for the purpose of supplying 4 PJ of gas
per annum for 15 years to CS Energy’s Swanbank ‘E’ power plant, located near Ipswich in
south east Queensland. Gas will be transported to Swanbank via the Roma to Brisbane
Pipeline.
CS Energy is to spend up to $10.8 million towards the Kogan North Development Project to
increase their share of the project to 50%. The Australian Pipeline Trust (APA) is to fund the
downstream processing facilities 100% and to toll the Kogan North gas through these
facilities.
Arrow estimates its share of the total Kogan North development capital of approximately $25
million will be approximately 10%.
Arrow is the Operator of the Kogan North CSG Project and retain a 50% working interest.
APA will operate the Central Gas Processing Facility.
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PL 198 - Tipton West Pilot (Arrow 80%, Comet Ridge 20%)
The Tipton West Pilot (TWP) is located in the Surat Basin approximately 20 km south of the
township of Dalby in Queensland
Two new pilot wells, TWP 14 and 15, have been drilled and completed and are being put on
production today. TWP 13 has been worked over and the gas rates are increasing daily now
that the well has returned to production. The two new wells were drilled to accelerate water
withdrawal and hence to improve gas flow rates.
The initial pilot wells were brought on stream last year and pressure responses were quickly
seen in monitoring wells up to 7 km away. This proved continuity of the coal seams and led
to a “Possible” gas reserves certification by Netherlands Sewell and Associates Inc. (NSAI)
of 1,086 PJ.
Achievement of a commercial flow rate and the subsequent upgrading of reserves to the
“Probable” category will allow the three existing sales Memoranda of Understanding (Ergon
Energy - 3.2 PJ p.a. for 15 years; BP - 15 PJ over 5 years; and ERM Wambo Power – 4 PJ
p.a. for 15 years) to proceed to finalisation of firm gas sales agreements.
First sales gas from the Tipton field is scheduled for mid 2006 at a rate of 10.2 PJ p.a.
ATP 644 (Arrow 100%) - Mount Lindesay -3 Core Hole
Coring has commenced on the Mt Lindesay appraisal well, located in the Clarence-Moreton
Basin, 7 km southwest of Beaudesert and 60 km south of Brisbane. The Mt Lindesay -1
discovery well was drilled in early 2004 and contained 27 metres of net coal with high gas
contents of up to 500 cubic feet per ton. The Mt Lindesay -3 well is located 5 km west of the
original well and is delineating the field in preparation for a subsequent production pilot.
The well and pilot are intended to confirm reserves and flow rates for supply of gas under two
previously announced Letters of Intent to supply gas and electricity to local industrial users,
AJ Bush and Sons and Gelita, as well as other potential gas customers in Brisbane/Gold
coast area
The well is currently coring ahead in the Walloon Coals sequence at 143 metres depth.
For and on behalf of the Board of Directors
Paul Marshall
Company Secretary
For further information contact:
Stephen Bizzell or Nick Davies
Phone (07) 3303 0650
Fax: (07) 3303 0651
E-Mail: [email protected]
Website: www.arrowenergy.com.au