Strike Energy has completed one of its most formative quarters with production testing and resource booking at the West Erregulla gas field, which has been named one of Australia’s largest, high quality, onshore conventional gas discoveries.
With the discovery at the West Erregulla gas field, Strike said the activities executed in the Perth Basin during the quarter centred around defining the subsurface and commencing development planning. Activities also included delineating the additional near-term targets within Strike’s 100 per cent owned acreage.
During the quarter, after the drilling and completion of West Erregulla-2 (WE-2), Strike conducted a multi-rate flow and pressure build-up test. During this testing period WE-2 flowed gas to surface from the Kingia sandstone from 48m of perforations across the target interval (4,799m – 4,951m measured depth) in the Kingia formation.
At the largest choke setting (2-inch), the well flowed at a rate of 69 million standard cubic feet per day (mmscf/d) with a wellhead pressure of 700 psig.
This result is the second highest flow rate achieved by any Perth Basin well and shows the highly producible nature of the West Erregulla resource.
Pressure support in the well was very good, with back pressure still significant using the large 2-inch choke.
Managing director and chief executive officer (CEO) Stuart Nicholls said the discovery at West Erregulla has proven the existence of a deep, conventional gas fairway within the Permian sequence of the Perth Basin.
“This discovery together with the activity of neighbouring operators validates Strike’s commercial and geological strategy, with Strike now holding the largest land and equity position within what is fast becoming one of Australia’s most prolific onshore conventional gas basins,” Nicholls said. “Having booked 593 BCF 2C Strike share and with a Wagina prospective resource of 137 BCF P50 Strike share, the previous quarter has set the foundations for 2020 to be a year of strong progress against our strategy to become a major Australian gas producer.”
Joint venture (JV) processes concluded in the fourth quarter, with the JV approving the work program and budget items for the drilling of West Erregulla-3 (WE-3) in the Northern section of the West Erregulla structure and additional surrounding 3D seismic.
WE-3 has been designed to accommodate higher production flow rates by utilising a 5.5” production casing, increasing significantly from the 3.5” completion in WE-2.
WE-3 will be completed in preparation for production from a Phase 1 development. Contracting and procurement processes have subsequently commenced and are well progressed to secure the drilling rig and long lead items associated with WE-3.
Strike is targeting an FID for the Phase 1 development at the end of quarter four 2020 and continues to advance this milestone as the company’s highest priority.
During the quarter Strike concluded negotiations with Traditional Owners for the Native Title Agreement on EPAs 82, 98 & 99, which is in the process of being executed. Strike expects the permits will be granted by the Western Australian Government by end of the first quarter 2020. These permits will enable Strike to begin exploration activities over this highly prospective acreage adjoining West Erregulla which Strike holds at 100 per cent.
Further validation of the prospectivity and pervasiveness of the Permian conventional gas fairway came in the quarter when Beach Energy announced a successful discovery in the Kingia sandstone at the Beharra Springs Deep well.
Testing of that well produced flow rates up to 46 million standard cubic feet per day, constrained by production tubing.
During the quarter Strike completed 90 square kilometres of 3D seismic over the Walyering gas discovery. Initial interpretation of the dataset is in line with Strike’s expectations and shows the presence of the structure previously identified on 2D seismic.
Should the data display a positive correlation between seismic amplitude response and well results (Walyering-1 flowed at 13.5mmscf/d), Strike is confident that that the broader Cattamarra play, which extends north to Ocean Hill, can be targeted for commercial conventional gas and liquids.
Piloting operations have continued during the quarter where both water and gas production has continued to support the prospectivity of the resource at the Jaws gas project in the Southern Cooper Basin.
Daily average gas production was measured at 20 million standard cubic feet per day at the start of the quarter which has risen to a high of 40 million standard cubic feet per day.
Bottom hole pressure has been drawn to 209 psig, which has seen instantaneous gas rates of 100 million standard cubic feet per day with water remaining stable at approximately 300 barrels per day.