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EMERALD OIL & GAS NL

ASX: EMR

The data on Australian Shares.com is intended as a guide only and is compiled from information in the public domain. Data on this website should not be used to make an investment or trading decision.

Description

Emerald Oil & Gas NL is a petroleum exploration company with projects in USA and Western Australia. Formed from the merger of Matrix Oil NL and Emerald Gas Limited, Emerald Oil & Gas NL (“Emerald”) was reinstated to quotation on the ASX in June, 2006 following a capital raising of $4million.

Emerald’s vision is to create a substantial oil and gas business from US oil and gas projects focused on delivering cash flow and incrementally building company value over next 1-3 years, then selectively divest de-risked assets to re-position into larger, high potential hydrocarbon resource opportunities.

Appalchian Basin - Magoffin County, Kentucky

The Appalachian Basin in Eastern USA has had a long history of hydrocarbon production, and contains many of the oldest oil & gas fields in the world. This Basin extends from New York State (Northeast) to Alabama (Southwest) a distance in excess of 1,000 kilometres, and contains over 1,000 named fields within the Basin.

22 Mile Project

KEP's 22 Mile project, consisting of two producing wells and a third well awaiting completion, commenced production in February 2010. The two producing wells had previously been produced at 200 Mcfd into the gathering system in 2008, prior to KEP acquiring the lease. However, operational issues with the new production system have limited production from individual wells to approximately 30 Mcfd per well. A remedial program is being developed to return to stable production at flow rates closer to those previously achieved from the wells.

Beetree Project

The Beetree Project, the second and more ambitious KEP gas project, involves a 4 inch gathering line potentially up to 22 km long, to provide gas market access for a number of stranded, shut in, sweet gas wells within easy tie-in distance to the line. KEP is completing the gathering line in stages, starting at the gas sales point and extending the line as sales gas production potential is proved through well testing for each additional line section. The first 3 km section of line has been completed and two wells near the end of this first pipeline section are currently being tested prior to connecting them and completing the gas facilities at the sales gas tie in point. An additional 4 potential wells have been identified so far for possible acquisition and connection to this section of line, with several more likely.

Salt Lick Project

The Salt Lick Project currently consists of approximately 989 lease acres with 7 existing gas wells. This area is planned to be developed after the Beetree Project is operational.

Shale Gas Potential

Emerald's area of operations in Magoffin County is underlain by the geographically extensive Devonian Shale (see figure in the previous "Appalachian Basin - Geology and Exploration History" section), locally known as the Ohio Shale. The lower section of this shale contains several hundred feet of organic, gas bearing shales, which larger operators in the region are now starting to produce with modern completion techniques and horizontal wells. Shales under KEP's current 2000 acre lease holdings potentially contain recoverable shale gas volumes in the order of 10 Bcf. Plans to define the shale gas reserves potential and establish initial shale gas production with re-completions or new horizontal wells are currently being developed. Shale gas is sweet and could therefore be produced through gas gathering infrastructure from KEP projects currently underway.

North West Alice - Jim Wells County, Texas

This discovery is the northern extension of a NE-SW Yegua gas trend, with several significant Yegua Gas Fields such as Ben Bolt, Braman, Starr Brite, Los Rubios and Four Sevens. These fields, in Jim Wells and Duval counties, have produced gas and condensate from all of the Yegua sands, but the two primary producing reservoirs are known locally as the Y-15 (Middle Yegua) and the Y-21 (Lower Yegua) sands. These sands are low-energy shelf deposits (areally extensive blanket sands), fifteen feet thick on average, with lateral porosity and permeability variations.

Shallow gas plays are also present in the Frio, Vicksburg and Stillwell sands. Several of these sands were gas bearing in the RJ Hunter #1 well.

In 2007, Emerald farmed in (10% WI) to a 12.5 mi2 Area of Mutual Interest (AMI) containing 2500 lease acres located over an undrilled section of the anticline structure to the north of the producing Yegua fields.

The discovery well, RJ Hunter #1 was drilled in March 2007 to a total depth of 8500 feet. The well intersected 50 feet of net pay containing gas/condensate in two main gas bearing zones and smaller intervals in the Middle and Lower Yegua sands, as well as shallower gas sands. Unfortunately, highly over-pressured Lower Yegua gas sands caused the wellbore casing to collapse on perforating the sand, so no flow test was possible. A subsequent flow test from the Middle Yegua sand was not definitive, producing gas and fresh water volumes. The well was then suspended.

Using well data from RJ Hunter #1 and offset wells, P3 reserves in the 12 mi2 Northwest Alice AMI area were estimated at approximately 100 BCF gas and 2.5 million barrels of condensate. Based on the results from the RJ Hunter #1 well, Noble Energy (Operator), acquired, processed and interpreted approximately 50mi2 of 3D seismic data, which included the NW Alice AMI and the remainder of the anticline structure to the North East. Noble identified seven drilling locations based on the 3D seismic interpretation and acquired a number of additional leases both inside and outside the AMI area to consolidate its position around the most prospective areas. However, Noble subsequently took a corporate decision to focus on recent large international discoveries.

In June 2010, Noble accepted an offer from OSO Exploration and Emerald, to sell its interests in over 4500 lease acres over the NW Alice gas trend, lying both inside and outside the NW Alice Joint Venture Area of Mutual Interest (AMI) and to license to an additional 15 square miles (9600 acres) of 3D seismic data contiguous to the 12 square miles (7600 acres) of 3D data already held over the previous AMI. As a result of this transaction Emerald increased its Working Interest to 35%, with the remaining interest being held by OSO Exploration.

Current plans are to interpret the newly leased 3D data, select optimal drilling locations and commence drilling to follow-up the RJ Hunter #1 gas/condensate discovery as soon as practical. The first well is planned for Q3 2010.

Separately, during 2009, Emerald acquired 100% WI in the RJ Hunter #1 Discovery well and surrounding 178 acres. Plans are being developed to re-drill the well to a position higher on the structure and complete itas a gas/condensate producer. Emerald also plans to acquire up to an additional 1000 acres of lease acreage contiguous to its current 100% WI area, either as part of the new NW Alice joint venture with OSO or separately at 100% WI.

The main targets for NW Alice drilling are the Middle and Lower Yegua sands. Both sands contain similar gas with a gas to condensate ration of 20 to 30 bbl/MMscf. Both sands will be targeted in every well. Gas and condensate recoveries from these sands are expected to be similar. Each successfully drilled sand on this structure could be expected to have characteristics approximately as follows:

• 2 MMcfd average initial production rate
• 2.5 Bcf gas & 60,000 Bbl condensate recovered per well
• Approximately 15 year production life

Canning Basin, Western Australia

Emerald Interest 12.75% to 100%

Emerald has secured an exploration acreage position of approximately 10,000 square kilometres in the Canning Basin in Western Australia, located approximately 1650 km (1000 mi) NNE of Perth. These permits lie on the highly prospective Pinnacle Fault trend, which runs for approximately 225 km along the northern edge of the basin.

The Pinnacle Fault is a key structural element between the Fitzroy Sub-Basin and the Lennard Shelf. It is believed to be the conduit for oil and gas migration from the Fitzroy Sub-Basin into structural and stratigraphic traps on the adjacent Lennard Shelf to the north. Emerald's acreage includes the western section of the fault's extension offshore as well as a section over the middle of the fault, to the West of the oil producing Blina/Sundown area.

In view of the discovery of porous Devonian “reefal” reservoir rocks in the Stokes Bay #1 well in EP104/R1, Emerald believes there is significant potential to discover several similar prospects along the offshore extension of the Pinnacle Fault.

Mine For

oil, gas

Location of operation(s)

USA, Western Australia

Australian Basins

Canning

Address

Suite 2, 12 Parliament Pl
WEST PERTH, WA, AUSTRALIA

Phone

(08) 9482 0510

Email

Website


Last Updated

11/04/2011

 

The data on Australian Shares.com is intended as a guide only and is provided purely as an indication of what information can be found through official announcements. Data on this website should not be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. The publisher (Intaanetto Pty Ltd) will not be held liable for any loss arising from the use of this website.