Oil Search has an extensive exploration acreage portfolio in PNG, covering some 20,600 square kilometres. This acreage is relatively underexplored and is highly prospective, particularly for gas. The portfolio is regularly reviewed as Oil Search seeks to optimise its exploration exposures. Oil Search continues to optimise its PNG licence portfolio as opportunities arise, with a number of transactions completed in 2010.
In August 2009, Oil Search was awarded seven mineral exploration licences in the PNG Foreland area, covering a total area of some 17,500 square kilometres. This area covers much of a defined basin where substantial coal seams have been intersected in a number of previous petroleum exploration wells. Although only lightly explored, initial analysis indicates that these coal seams have the potential to contain coal seam gas (CSG). The acquired acreage provides Oil Search with a dominant position in this new play type in PNG and complements the Company’s strong position in conventional gas.
The exploration programme for 2010/11 includes:
The Wasuma well in PPL 219 (Oil Search 71.25%, Operator) spudded in January 2010 and was drilled to a total depth of 3,900 metres. The interpretation of electric log data indicates a three metre zone of hydrocarbons is present within the Lower Iagifu sandstone in the Wasuma Deep footwall structure. The Iagifu and Toro reservoir intervals were thinner and of poorer quality than pre-drill expectations. Consequently, the well was plugged and abandoned as a non-commercial discovery.
As highlighted previously in this report, the ADT2 ST3 well in PDL 2 (Oil Search 60.05%, Operator) was flow tested during the quarter and produced oil from the Digimu interval, within a previously untested footwall forelimb compartment of the Agogo Field. Importantly, the recovery of oil from the footwall forelimb of Agogo, together with the confirmation of a hydrocarbon charge in the footwall at Wasuma, has opened up a new play fairway in the Fold Belt and has upgraded the potential of similar footwall structures that are mapped on trend and in adjacent acreage.
Also during the period, Rig 104 was mobilised to the Korka-1 well site in PPL 260 (Oil Search 50.00%, subject to Government approvals, Operator). Drilling commenced in April following the completion of the Wasuma well. In PPL 219, site construction commenced at the Mananda Attic well site in the north western quadrant of the licence, in preparation for a well scheduled to be drilled in late 2010.
Elsewhere in the Fold Belt, a 130 kilometre 2D seismic programme, targeting prospects and leads adjacent to, and on trend with, the Hides and Angore gas fields commenced in PRL 11/PPL 233.
In the Foreland, 60 kilometres of 2D seismic over the Barikewa gas field in PRL 9 (Oil Search 42.55%) was processed and interpretation is scheduled to commence shortly to enable well site construction during late 2010 and drilling in 2011.
During the quarter, preparations were made for a 4,720 square kilometre 3D seismic survey over the offshore licences PPL 234 (Oil Search 80.00%, Operator) and PPL 244 (Oil Search 45.00%), which commenced in April. The objective of this 3D seismic survey is to mature gas prospects in the Gulf of Papua, a proven gas province, prior to drilling.
Preparations for a 3-6 well Coal Bed Methane drilling programme within Oil Search’s Mining Exploration Licences in the Forelands region took place during the quarter. Drilling is expected to commence in the third quarter of 2010 and will test the coal quality, its extent and thickness.
Drilling Rig