Plans for a giant oilfield redevelopment off the coast of Timor-Leste have taken a huge blow following the disappointing results of a newly drilled appraisal well.
Operator Carnarvon Energy revealed Monday that wireline logging operations had been completed at the Buffalo-10 well, with the previously announced discovered oil column determined to be residual and uncommercial.
It added that it would carry out work to leave the well “in a safe condition” before the jack-up rig Valaris 107 is demobilised.
Carnarvon had hoped that success at Buffalo-10 would spur a redevelopment of the oilfield which was shut-in by Nexen Petroleum in 2004.
The field was originally discovered in 1996 by BHP, with output commencing in 1999 and reaching rates of up to 50,000 barrels per day. However, production had fallen to about 4000 bpd by the time it was shut-in, having produced roughly 20.5 million barrels of oil since start-up.
Prior to drilling, Carnarvon had placed the mid-case recoverable volumes at Buffalo at 31 million barrels on a gross best estimate contingent resource basis, believing there was a “strong likelihood Buffalo-10 will confirm a sanctionable development project based on the minimum economic field size”.
Upstream has contacted Carnarvon for more details on what the drilling results at Buffalo-10 mean for its overall field redevelopment plans.
The field sits in Timor-Leste's exclusive waters, and is owned by Carnarvon and 50:50 partner Advance Energy.
JV partner's comments
Advance's chief executive Leslie Peterkin said the well results were "both disappointing and hugely surprising given the independently-verified risk assessment which confirmed a highly-likely commercial outcome from the well".
He said the joint venture had invested “a significant amount of technical work into the project which underpinned our high degree of confidence that the well would unlock the significant value of the field”.
"The post-well evaluation indicates that the well was drilled into the hanging wall of a fault, although uncertainty in seismic resolution also contributed to the reservoir being significantly deeper than expected at this location."
“It is not the case that this result means that all of the attic oil volumes certified by RISC have been negated. The Buffalo joint venture will conduct further technical analysis in the coming weeks to fully understand why the attic was not encountered as prognoses at the drilled location.”
"We believe it is likely that the JV will relinquish the Buffalo asset as neither company wishes to fund a second appraisal well in the field."
Operator looks to Pavo and Apus
With the results from the Buffalo-10 appraisal well proving to be disappointing, the operator indicated it would now turn its attention back to promising exploration prospects offshore Western Australia.
“The results from Buffalo-10 well are disappointing for the Carnarvon team and shareholders, but now our attention moves to the commencement of the high impact Pavo-1 and Apus-1 exploration wells within the next month in the Bedout basin,” said Carnarvon managing director Adrian Cook.
The jack-up Noble Tom Prosser has been contracted to drill both wells, starting with Pavo-1 and followed immediately by Apus-1, with operator Santos expected to kick off drilling later this month.
The prospects lie near the Santos-operated Dorado oil discovery, in which Carnarvon also holds a stake, with Pavo-1, in Block WA-438-P, targeting mean recoverable volumes of 82 million barrels of liquid hydrocarbons and 108 billion cubic feet of gas in the Caley Fm interval.
Apus-1 is planned to be drilled in Block WA-437-P, and has two targets, with mean recoverable volumes of 235 million barrels and 408 Bcf (in the Caley and Milne Member sands).