Tap Oil Limited (“Tap”) is pleased to advise that the Kan Tan IV semi-submersible drilling rig commenced drilling the Craigow-1 well at 03:00 hrs (EST) on 24 December 2010.
The Craigow prospect is an anticlinal trap defined on 3D seismic data, in a good location for both reservoir quality and oil charge. Craigow is estimated to contain mean recoverable oil volumes of 28 million barrels with upside potential for 50 million barrels. A number of follow up prospects (including the previously announced Tolpuddle and Glenbothy prospects) have also been defined on 3D seismic with total potential of over 100 million barrels of recoverable oil in the permit.
Craigow-1 is planned to take approximately 19 days in total. Final total depth will be around 1,826 metres MD. The budgeted well cost is $18 million. Weekly updates will be provided during drilling operations.
Tap’s Managing Director, Troy Hayden , said he was pleased to have commenced drilling the Craigow-1 oil prospect after a long wait for the rig.
“Success at Craigow, being an oil target, could be a lucrative development for Tap. In addition, this would confirm the current geological model and pave the way for the drilling of the Tolpuddle and Glenbothy prospects in the future” Mr Hayden said.
Background
T/47P is a 2,886 km2 exploration permit located in the offshore Bass Basin between Victoria and Tasmania. The Bass Basin has historically had wells with oil and gas shows and in the last decade has started to yield commercial success.
In 2008 Tap acquired both 2D and 3D seismic over the permit and this data was interpreted in 2009. Further geological and geophysical work was done through 2010 to more fully characterize the three prospects, Craigow, Tolpuddle and Glenbothy. Craigow was selected as the first prospect to be tested due to its better risk profile.
Should Craigow be a discovery, it has good potential for commercial development due to the shallow water depth, the depth of the objective, and the close proximity to Shell’s refinery at Geelong.
In July 2010 Tap increased its stake in T/47P from 40% to 75%. This came via a transaction whereby Tap assumed the 35% working interest of Singapore Petroleum Company (SPC) in return for receiving $9.8 million for the increased share of the joint venture’s drilling obligations. Therefore Tap’s net contribution to the budgeted well cost is approximately $4 million. Tap’s decision to take over SPC’s interest was based on the Company’s view that T/47P is an attractive exploration prospect and that the terms of the transaction offered by SPC were commercially favourable. SPC was recently taken over by PetroChina.
As previously advised, Jubilant Energy Pty Ltd, a subsidiary of AIM listed Jubilant Energy N.V., is currently in default of the joint operating agreement due to the non-payment of a number of recent cash calls. Tap is pursuing Jubilant for the unpaid cash calls and Jubilant is obliged to meet its expenditure obligations for the Craigow well.
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Source: Tap Oil, December 24, 2010; Image: Awexplore