Setting
The permits WA-314-P, WA-315-P and WA-398-P are located 460km north of Broome and straddle the northern and eastern flank of the Scott Reef-Buffon high trend. Water depths over most of the permits range between 470 and 540m. The Karoon permits, including the recently discovered (2009) Poseidon Field, are immediately on trend with the giant Scott Reef (Torosa)/Brecknock/Calliance gas fields (Plover Formation reservoirs), discovered from the 1970s and held by the Woodside Joint Venture.
The Poseidon field has a Contingent Resource in the range P90-3 TCF, P50-7TCF and P10-15TCF (Karoon assesment post Poseidon-1), reservoired in Plover Formation sands. The Contingent resource has been independently verified by DeGolyer and MacNorton based on the Poseidon-1 well and the pre-drill seismic data set, giving Karoon a 'high estimate' net value of 7.6 TCF wet gas (Gross =19 TCF).
The second appraisal well, Poseidon-2 located down-dip from Poseidon-1 discovery well has achieved the following objectives in 2010;
Plover Formation
- established the continuity of the gross sand intervals and intervening shales over a large part of the field.
- recovered gas samples and pressure data from Drill Stem Tests (DSTs).
- proved log interpretation results indicating the presence of movable gas and adequate reservoir quality in the ‘B’ interval reservoirs.
- Karoon modeling of core data and test tesults indicate that gas in the poorer quality ‘B’sand interval in this down dip location would likely contribute gas to planned production wells on the crest of the field. High flow rates ( for production wells) are not required to meet this objective in this down-dip appraisal setting.
The results are considered unlikely to materially impact the Karoon pre-drill P90 3TCF, P50 7TCF and P10 15TCF Poseidon Contingent Resource range estimates for the Plover Formation reservoirs.
Montara Formation
The Poseidon-2 well discovered an additional Montara Formation gas reservoir not seen in the Poseidon-1 well. The 20m gross sand interval showed good petrophysical response indicating a gas charged reservoir. Flow from the formation during subsequent drilling had to be checked with higher mud weights (permeability indicator).
Additional Contingent Resource potential is possible from the Montara Formation.
Interest
WA-314-P & WA-315-P Karoon 40% ConocoPhillips (Operator) 60%
WA-398-P Karoon 40% ConocoPhilips (Operator) 60%
Potential
There are a number of remaining Jurassic Plover level and higher risk Tertiary leads in the three permits.
Remapping of the Poseidon structure and surrounding leads is now underway. This mapping will be enhanced by the acquisition of the Poseidon 3D seismic which began in October 2009 and which will provide uniform, high quality seismic coverage over the entire Poseidon structure and surrounding leads which are currently only partly defined by 2D seismic data.
The Lion Prospect isa higher risk leads at the Oligocene level where amplitude brightening, possibly characteristic of hydrocarbon-bearing sediments, has been identified on the seismic.
Work program
A multi-well appraisal and exploration drilling program is planned over the coming year to better define the size, quality and commercial potential of the Poseidon field and nearby prospects and leads.
Surrounding areas activity
The Woodside fields are currently being appraised and developed. In this appraisal program Woodside acquired 3D seismic and drilled Torosa-5, Torosa-6 and Calliance-3 in 2008 with Brecknock-4 in 2009. The Woodside Browse Development has a current resource estimate of 14 TCF gas and 370mmbl of condensate (Woodside, August 2009).
The other giant gas field lying to the east of Karoon's area is the Inpex Browse Ltd and Total E&P Australia, Ichthys gas and condensate field. This field is estimated to contain 12.8 TCF of gas and 527 mmbl of condensate and will source a liquefied natural gas (LNG), liquefied petroleum gas (LPG) and condensate project to be located near Darwin(Inpex, 2009). The main reservoir units are the Upper Vulcan and early mid-Jurassic Plover Formation reservoirs. Gas was also encountered in basal Oxfordian (Lower Vulcan Formation) sandstones. This gas will be supplied to a Darwin LNG site via an 850km subsea pipeline.
20 Km to the Northeast of Karoon's acreage is the Argus gas field containing approximately 2 TCF of Contingent Resource (Karoon estimate) reservoired in Montara Formation sands.
Approximately 40km east of Karoon’s WA-398-P Permit, the recent Santos Joint Venture Burnside-1ST1 well has penetrated a 65 meter gross gas column in Upper Vulcan Formation sandstones (Santos, August 2009). The size of this discovery has not been announced.
The proposed Kimberly James Price Point LNG Hub is located 60 km north of Broome.
Geology
In Karoon's permits the primary reservoir targets for the prospects are the Jurassic Plover Formation sandstones. The play type mapped is the same as that identified along the Scott Reef/Brecknock anticlinal trend. Secondary reservoir targets are the Campanian – Maastrichtian Puffin Formation sands and the Callovian-Oxfordian Montara Formation sands.
Large volumes of oil and gas charge are proven in the Browse Basin through the discoveries of the Ichthys gas condensate field, the Scott Reef, Brecknock, Brecknock South gas fields, the Echuca Shoals and Crux fields and the Cornea Oil Field. Recent technical work also predicts that Karoon’s permits are well placed to receive gas and liquids charge during the Cretaceous to the Tertiary time period. Known source rocks in the basin include the Echuca Shoals Formation, Vulcan Formation and Plover Formation.
Good quality top sealing capacity is proven by the Scott Reef (500m+ gas column) / Brecknock / Brecknock South Field and the Ichthys Field (200m+ gas column). The same seal intervals are present over Karoon's Poseidon field and prospects and leads.
The Karoon Gas/ConocoPhillips Poseidon-1 well spudded in January 2009 and was the first well in a planned multi-well exploration program. This discovery well intersected three gross gas-bearing sand packages of 10m, 67m and 140m thickness in Plover Formation sandstones.
The following well Kontiki-1 penetrated gas saturated Middle-Late Jurassic Plover Formation sandstones of poor reservoir quality on the Buffon anticlinal trend.
The third well, Poseidon 2, drilled from the end of 2009 intersected a 20m gross gas interval in the Montara Formation, in addition to the three Plover Formation sand packages intersected at Poseidon 1. The well was a successful appraisal of the extent and quality of the upper and lower sands penetrated in the Poseidon-1 well where they thicken along the southern flank of the Poseidon structural high.
February 2010