poseidon field fails to deliver for karoon

Article on smh

Poseidon field fails to deliver for Karoon
BARRY FITZGERALD

February 3, 2010 - 7:41PM .

Latest testing of the much-vaunted Poseidon discovery by ConocoPhillips and local junior partner Karoon in the Browse Basin off Western Australia has not produced the big confirming flow of gas to surface that supporters of the high-flying Karoon have been waiting on.

But Karoon insists that results from the follow-up to the Poseidon discovery well have not damaged, in any material way, its pre-drill estimate that Poseidon could contain as much as 7 trillion cubic feet of gas in the Plover reservoir - enough to rank it as a potential liquefied natural gas project.

Karoon announced the latest test results from the Poseidon 2 well after the close of trade today.

The stock was suspended pending the release but has nevertheless weakened from more than $11 a share in early January to $6.66 a share on Monday in response uncertainty about initial results.

Poseidon 2 discovered a new gas zone in the Montara formation but a drill stem test was inconclusive, with Karoon believing that "communication' with the formation was not established in the zone tested.

The partners will test the zone in a new area.

Meanwhile, brine present in the zone tested in the main Plover formation restricted the gas flow to a nominal amount.

"The Poseidon 2 well has met the objective of testing the extent and quality of reservoirs down dip from the Poseidon 1 discovery in a thickened Plover formation," Karoon said.

It said the position of Poseidon 2 about six kilometres from the discovery well was always risky if it was high gas flow-rate that was sought.

The crest of the greater Poseidon structure will next be tested by the Kronos 1 exploration well.

Karoon said it had the aim of confirming commercial production rates.