Jabiru 7 Well Expected To Show 'modest-sized' Pool

Sydney Morning Herald

Monday February 29, 1988

By ROFF SMITH, Resources Writer

The Timor Sea is likely to be in the limelight today, with the joint venture partners in the Jabiru 7 well expected to reveal the results of the production tests carried out at the weekend.

The past few weeks have been full of suspense for Australian oil producers, with four wells being sunk in the region's most prospective territory - the Timor Sea and Papua New Guinea.

Peko Oil, which has exposure to all of the Timor Sea permits, has had its share price climb from 86c to hit $1.02 late last week on speculation that Jabiru 7 had found oil. Peko closed the week at $1 in very thin trading.

Sources within the company have hinted that the well did indeed encounter an oil pool of a size "within expectations".

"I would take that to mean a modest-sized pool - nothing gigantic," said Mr Mark Elliston, an oil analyst at Paul Morgan and Co.

"It will increase the reserves, but just as importantly, it will add a bit of knowledge about the geology of the region."

Jabiru 7 was drilled to test a northerly fault block and possibly extend the Jabiru field. There was some difficulty earlier when the complex geology of the region resulted in the well's being spudded in the wrong place and tapping into a fault block already tested by previous wells. The well was plugged back from a depth of 1,800 metres and deviated into the northerly fault block.

Papua New Guinea oil explorer Oil Search's share price has climbed steadily from 66c earlier this month to last week's high of 92c, with investors'obviously hoping for great things from the company's two wells being sunk in the Papua New Guinea highlands.

The share price slumped back to 88c on Friday on the disappointing news that the NW Hedinia well had encountered a gas column "in probable Toro sandstone formation" - the sandstone that provided the exciting oil find in the Iagifu 1 well.

The well has not yet been drilled to its total depth and it is possible that NW Hedinia, like the original well drilled on the structure, SW Hedinia, may have an oil column.

Oil Search also is drilling the Kutubu 1 well on another structure adjacent to the Iagifu field.

In other news from the Timor Sea, Ranier 1, a wildcat well in ACL-2, is being cored.

This is an expensive and time-consuming task. Company sources would not be drawn on the significance of the costly procedure, although the news has analysts suspecting the joint venture partners may have found a hydrocarbon column.

Because of the well's position - midway between Challis and Jabiru - it is possible the coring is being done to gain stratigraphic knowledge of the area

© 1988 Sydney Morning Herald

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