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West Erregulla JV halts well activities for two weeks

Strike Energy has suspended activities at the West Erregulla 3 (WE3) well in the North Perth Basin for approximately two weeks due to abnormal over-pressured gas zones.

The company, which operates WE3 as part of its 50:50 joint venture with Warrego Energy, reported on Monday that operations would be suspended with a series of cement plugs and heavy mud columns.

It planned to move the rig to the West Erregulla 4 well (WE4), which Strike understands after careful data reviews, will not encounter the abnormal over-pressures experienced at WE3.

While Strike stated that these abnormal over pressures were a positive indication of the presence of a larger than anticipated high-quality gas resource at WE3, it does limit the well design.

“In order to safely drill ahead to the target reservoirs, additional well engineering materials procurement and equipment will be required,” Strike stated.

“In order to maximise rig efficiency, it has been decided to temporarily suspend WE3 and move the rig to the already prepared site at WE4 and commence drilling operations there whilst the necessary processes are completed in order to re-enter and resume drilling at WE3.”

This delay is expected to have a follow-on effect and cause a relatively short set back to the final investment decision (FID) for the West Erregulla phase one project.

Strike chief executive officer and managing director Stuart Nicholls said the joint venture partners remained confident that they will be in position to make the FID within the first half of 2021.

“Whilst a temporary delay is frustrating, the over-pressured gas column encountered is diagnostic of a significant Permian gas resource, which is a major positive,” Nicholls said.

“The high-pressured reservoirs of the Permian gas fairway, whilst in this case abnormally high, are one of the key attributes that supports the West Erregulla resource as a top quartile, competitive future gas supply.

“The benefit of the multi-well appraisal campaign is that WE4 is ready and waiting for the rig to move in and convert the associated resources to reserves.”

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