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Warrego Confirms Rig Selection for West Erregulla Appraisal Wells

Source: 6/16/2020, Location: Not categorized

Warrego Energy has confirmed that the EP469 joint venture has secured the Ensign 970 drilling rig for the upcoming exploration/appraisal campaign at West Erregulla, onshore Perth Basin, Western Australia.

The exploration/appraisal plan provides for the drilling of West Erregulla-3, located in the northern area of the West Erregulla gas field, in the second half of 2020 (subject to permitting), followed by the West Erregulla-4 and potentially West Erregulla-5 in 2021.

RISC Advisory, which recently completed the independent third-party certification of the West Erregulla resource for Warrego, agrees with the Company’s estimated geological probability of success for the West Erregulla-3 well of 65%.

Warrego is supportive of the Operator’s view that material cost savings can be generated by incorporating West Erregulla-3 and 4, and potentially 5, into the current exploration/appraisal plan.

Warrego Energy Group CEO & Managing Director, Dennis Donald, said:

'The announcement by the Operator, Strike Energy, that it has secured the Ensign 970 drilling rig for West Erregulla-3 and 4 is good news for the joint venture.

'With regulatory approvals well advanced we can now proceed with drilling the wells and potentially add to the 513 Bscf gross independently certified 2C Contingent Resource estimate advised by RISC.

'West Erregulla-3 is particularly important as it will target the undrilled Northern Area of the field. Warrego’s analysis supports the view that a successful well could see the 102 Bscf gross 2U Prospective Resources converted to 2C Contingent Resources, with the possible addition of further 2C Contingent Resources.' he said.

'A complete suite of downhole data from West Erregulla-3, particularly from the Kingia and High Cliff Sandstone reservoirs could also potentially enhance the contingent resource estimate for the Central Area of the field. In addition, if we can establish a gas water contact in the proposed well then a substantial revision to our reservoir model, in line with SPE-PRMS guidelines, may result.

'Based on significant learnings from drilling the West Erregulla-2 well, we are encouraged by the Operator’s view that material cost savings can be achieved in drilling West Erregulla-3 and 4,' Mr Donald said.

'Warrego’s negotiations with several potential WA domestic gas buyers are ongoing and any increase in certified 2C Contingent Resources would be well received in the gas market in light of the delays to some major offshore projects,' said Mr Donald.

Only one third of the EP469 block has been seismically assessed and a further 3D seismic program will be conducted in Q2 CY2021 to complete seismic definition of the block acreage. The results of this survey will be used for the planning of future wells and the sanction of a Field Development Plan.

'With high quality onshore assets, significant resources, no acquisition costs and multiple low-cost gas processing options available, Warrego is well positioned to be a preferred supplier to the WA domestic gas market,' Mr Donald concluded.

The Joint Venture Partners in EP469 are: Warrego Energy (via subsidiaries) 50%; Strike Energy (via subsidiaries, Operator) 50%.

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