ASX RELEASE Release Date: To: From: Re: 10 September 2007 Australian Stock Exchange Ltd Eric Streitberg Valentine-1 Update No of Pages: 3
Please find attached an update on the Valentine-1 exploration well.
The attached release will also be available on the Company’s website at; www.arcenergy.com.au.
For inquiries please contact:
Eric Streitberg, Managing Director Telephone +61 8 9480 1300 Freecall 1800 337 330 Email [email protected]
About ARC Energy Limited
ARC Energy is one of Australia’s pre-eminent energy companies, owning and operating oil and gas interests in the Perth, Canning and Bass basins, and internationally. Listed on the Australian Stock Exchange with a market capitalisation of approximately A$450 million, ARC has an aggressive onshore and offshore exploration and development drilling program. It continues to drive increased shareholder value by the early adoption of innovative technical and commercial practices.
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Level 4, 679 Murray Street, West Perth, Perth Western Australia 6005
VALENTINE-1 DRILLING REPORT CANNING BASIN, WESTERN AUSTRALIA
Date: Permit: Well Location: Directional offset to target: Elevation: Prognosed Depths (measured KB): Prognosed drilling time: Spud Date: Present Depth: Time of Reporting: Operations Since Last Report: Current Operations: Hydrocarbon indications: Participants in the well (post earning): 10 September 2007 R1 Lat : 17o 08’ 23.46”S Long : 123o 42’ 32.40”E 0 metres Ground Level is 12.4mAMSL Rotary Table is 18.1mAMSL Top primary objective Total depth 3,222 metres 3,407 metres 25 days 1230 hrs, WST 12 August 2007 2,695mMD 0600 hrs, WST 10 September 2007 Intermediate logging of secondary objectives over the interval 808m to 2589m MD has been completed, and the well is now being drilled ahead to the primary target, Virgin Hills Formation. Running in hole after trip for bit change Strong mud gas shows over the interval 2240m to 2470m MD have now been evaluated by wireline logging: see comments below. ARC Energy Limited - 38.95% (Operator) Empire Oil and Gas NL - 14.8% Emerald Oil & Gas NL - 12.75% Pancontinental Oil & Gas NL - 10.0% Phoenix Resources PLC - 10.0% First Australian Resources Limited - 8.0% Indigo Oil Pty Ltd - 5.5%
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Several strong gas peaks were recorded from monitoring gas in the drilling fluids (“mud gas”) over the interval 2240 to 2470m measured depth (MD). These were considered sufficiently material to warrant an intermediate wireline logging run over the gross open-hole interval 809m to 2589m MD, and this has now been completed.
Preliminary analysis of the wireline log results indicates the presence of porous (15%) and permeable sandstones of the Lower Anderson Formation over the gross interval 2100 to 2260 m MD. A preliminary interpretation of the electric logs and MDT results indicates low hydrocarbon saturations, including the zones of strong mud gas shows at 2240 m to 2260m MD. These Lower Anderson sands and their lateral equivalents are the primary target of the Stokes Bay 1 well, which will target them in a crestal location on the structure. Please note that at Valentine-1 the secondary reservoir objective Anderson Formation sands are not mapped within closure. This 160 metre gas show interval in Valentine-1 within the Anderson Formation enhances the prospectivity of these objectives in the updip location in the Stokes Bay-1
Comment:
well.
The Stokes Bay 1 well will be drilled following Valentine 1. The strong mud-gas shows in the deeper Laurel Fm (2400 m to 2470m MD) are interpreted as being associated with a series of organic rich tight carbonates and shales.
The results to date at Valentine 1 are very encouraging for the prospectivity of the updip Stokes Bay well, and also for the regional prospectivity of the Basin as they confirm the presence of a significant hydrocarbon system in the Fitzroy Trough of the greater Canning Basin, and have confirmed the presence of reservoir quality sands and high quality shale seals.
Since wireline logging, at 0600 hrs today, the well has been deepened by 106m (to 2695mMD) towards the Virgin Hills primary objective prognosed at 3222mMD. In drilling the additional 106m, further elevated gas readings have been recorded, and these have yet to be evaluated.
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ARQ Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
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