SOURCE:http://www.*.com.au/companies/news/39732/...

SOURCE:http://www.proactiveinvestors.com.au/companies/news/39732/norwest-energy-encouraged-by-early-gas-flow-from-carynginia-formation-39732.html


Norwest Energy encouraged by early gas flow from Carynginia Formation
Tuesday, February 19, 2013 by Bevis Yeo


Norwest Energy (ASX: NWE) has flowed back gas at a promising rate of up to 350,000 cubic feet per day from the Carynginia Formation at its Arrowsmith-2 well in the Perth Basin, Western Australia.

This rate was recorded several times since flowback started on 15 February 2013.

Notably, the strong early gas rate from the Carynginia is encouraging as the shale formation only had a limited period of flowback in the original 2012 hydraulic fracture stimulation program due to a tight operational timeline and still contains a large percentage of frac fluid.

Norwest chief executive officer Peter Munachen told Proactive Investors that flow rates were likely to increase: “We are optimistic that is what will occur, but in terms of what rate it will flow at, that’s the 64 million dollar question.”

He added the flows came from a single 50 metre frac zone, which compares well to the flows of 1.8 million cubic feet of gas per day or more from multiple frac zones that have been achieved in the Cooper Basin.

Munachen also noted there was still a lot of frac water within the Carynginia and that a strong, steady stream of that was flowing out in addition to the frac flare.

“It is a case of will the water come off on its own accord or do we have to go back and do some swabbing or other techniques?”

Following testing of the Carynginia Formation, operations will continue with the testing of the Irwin River Coal Measure and High Cliff Sandstone intervals, the latter of which flowed at a maximum rate of 777,000 cubic feet per day following fracture stimulation in July 2012.

The testing of the Carynginia Formation, Irwin River Coal Measures and High Cliff Sandstone is expected to take up to 4 months, depending upon operations.

“If the Caryniginia starts performing higher, we might finish that early and that get down to the next zone,” Munachen added.

Carynginia Formation

The Carynginia Formation is considered a primary target in the well and is the most typical shale formation in the Perth Basin with good total organic content values.

It is demonstrated to be laterally extensive and is about 250 metres thick in the vicinity of Arrowsmith-2.

Two intervals were fracced in the Carynginia Formation in August 2012 though both were flowed back together.

Importantly, the Carynginia had flowed at a rate of 4 million cubic feet per day from Arrowsmith-1 when it was drilled in the mid-Sixties.

Kockatea Shale

Norwest has appointed independent consultants to carry out further analysis of the shallower Kockatea Shale to further evaluate any potential it may have as an oil producing zone.

Arrowsmith-2 well was shut in at the conclusion of Kockatea Shale interval swabbing operations in early December 2012 in order to monitor pressure build-up characteristics of the fracture stimulated zone and to provide additional data for resource estimation purposes.

This continued until late in January as Norwest awaited arrival at site of the necessary equipment to isolate the Kockatea Zone and then to mill out the plug at the top of the Carynginia Formation.

The Kockatea is considered a secondary target, though the recovery of oil cannot be ignored.

“The simple fact is, there is oil there, and the conundrum is where did it come from? Is it shale oil or is it from one of the formations below?” Munachen said.

“It behoves us to investigate that to the fullest extent.”

Both the Kockatea and the Carynginia were estimated by the U.S. Energy Information Administration in 2011 to host 59 trillion cubic feet of gas within the Perth Basin.

Arrowsmith-2

As each interval is evaluated and results compiled, an independent resource booking will be made per interval.

This will assist Norwest in planning future development of the EP 413 permit area, including the proposed 3D seismic program and future drilling of one or more horizontal wells.

Norwest has had detailed economic study carried out by an independent third party consultancy to fully evaluate the commercial opportunities of providing both gas to the Western Australian market and direct sales agreements with customers.

Norwest holds a 27.945% interest in EP 413. The remaining partners are AWE Limited (ASX: AWE) with 44.252% and Bharat PetroResources (27.803%).