Beach Announces Contigent Gas Resource from Shale Wells
Beach Energy has booked a large unconventional onshore gas resource from its two vertical shale gas wells in the Cooper Basin.
The company said the wells were not designed for production purposes but as data gathering wells only, making this resource booking an excellent outcome given the work undertaken to date.
A contingent resource of 2 trillion cubic feet (TCF) of gas has been booked for the two wells, a volume that will have a material impact on Beach’s resource update, which will be released later this month.
Beach said that substantial upside potential still exists to expand this resource estimate through further evaluation and flow testing during follow up exploration and appraisal activity.
Beach Managing Director, Reg Nelson, said, “The booking of a contingent resource of this size is a clear indication of the potential within our unconventional gas acreage in the central Cooper Basin.”
To put the quantum of this 2 TCF resource booking for PEL 218 into perspective:
• It is approximately one third of the total historical gas production from the Cooper Basin (estimated at 6 TCF);
• It is in excess of 330 million barrels of oil equivalent; and
• It is approximately 5 times Beach’s 30 June 2010 reserves figure.
The Holdfast-1 and Encounter-1 shale wells have been assigned an initial gas resource estimate of 1TCF each, based on a restricted area of 100km2 around each well.
Nelson, believes the deeper, unconventional formations of the central Cooper Basin area, including shales and other unconventional gas bearing formations, could hold vastly more gas than has already been discovered or produced historically from the area.
He added, “The Cooper Basin shales and other formations tested to date are very thick, gas saturated and have the potential to flow at rates we believe will meet future commercial thresholds.”
“The resource booking assigned relates to an area of 100 km2 around each well within the PEL 218 permit, which covers an area of approximately 1600 km2. Our test work to date indicates that the unconventional target zones, including the various shale layers, stretch underneath the entire permit, so there is potentially significant upside to these initial gas resource bookings. Importantly, Beach has 90% equity in the Permian section of PEL 218,”
Beach now plans to drill two pilot production horizontal wells in 2012, to test the flow rates of the target zones.
During initial flow testing, the Holdfast-1 well had gas flow rates of up to 2 million standard cubic feet per day. It is expected that a horizontal production well will deliver a much higher flow rate as it gives a much greater exposure to the target zone.
The resource calculation is based on observed flows, following successful fracture stimulation and continued flow testing at Holdfast-1, and takes into account the main shale and other formation target zones (i.e. the Roseneath Shale, Epsilon Formation and Murteree Shale and the top section of the Patchawarra Formation).
The resource calculation does not include significant upside potential of the, as yet, untested and deeper Patchawarra Formation and the shallower Toolachee and Daralingie Formations.
Source: Beach Energy