Sydney, June 15, 2006 AEST (ABN Newswire) - Aurora Oil and Gas (ASX: AUT) report that the #1 Dolores Well spudded at 0100 hours Texas time on 13 June.
At report time (0600 hours on the 13 June, 2006 Texas time) the well had reached a depth of 279 feet in 14.75 inch diameter hole and was drilling ahead.
#1 Dolores is the first of 5 initial development wells planned on the West Black Lake gas discovery, which is located onshore Texas, USA. #1 Dolores is located approximately 1,300 metres north-east of the discovery well which intersected a gas-bearing reservoir interval totaling 300 feet.
The #1 Dolores well is planned to be drilled vertical and if appropriate, completed for production by standard acid fracture stimulation. Proposed total depth of the #1 Dolores well is about 13,800 feet which is 100 feet above the gas - water contact in the discovery well.
Weekly well progress reports will be issued by Aurora plus any additional reports to ensure the market is informed.
The operator of the well is private USA company, Texas Crude Energy Inc. There are no other listed participants in the development project.
Aurora will earn a 20.15% interest in the initial five wells (15.1125% Net Revenue Interest) through the funding of a 40.3 % interest in each well until individual well payback. The Operator's estimate of potential recoverable reserves from the initial five development wells is approximately 30 BCF.
Following the completion of the initial five well development drilling program, Aurora has the option to acquire a 10% working interest in the balance of the approximately 600 BCF potential Project for the payment of US$1 million and to participate on a 1:1 basis thereafter in respect of that interest. (Aurora would maintain its 20.15% interest in the initial five wells).
Aurora Executive Chairman, Jon Stewart said: "We are excited about the potential for West Black Lake to be a significant and long term producing asset of the Company. The remainder of 2006 is set to be a very active year for Aurora with two development wells now underway, one here at West Black Lake (gas) and the other at North Belridge (oil) in California. Further development wells are planned for both projects as well as at Flour Bluff and a rig to drill our major exploration well at Sugarloaf is expected to be on site late July."
Background - West Black Lake
West Black Lake is a new gas discovery in the Cretaceous age back reef limestone trend in the on-shore Gulf Coast region of the USA. West Black Lake was defined using proprietary seismic inversion technology, which had been used to locate a number of successful development wells on an adjacent 500 BCF gas field. The proprietary seismic technology defines porous zones (porosity and thickness of porous zone) within the normally tight Cretaceous limestone formation. The seismic porosity has been calibrated against core and well log measurements. Recoverable reserves per well estimated using the 3-D seismic porosity and thickness measurement at the adjacent gas field have an 88% correlation to actual well ultimate production. The Operator, Texas Crude Energy Inc. (TCEI), expects the same level of predictability in the West Black Lake project area. The porous zone intersected in the West Black Lake discovery well correlated closely with the seismic predicted porosity and thickness. The seismic technology is expected to provide a high degree of confidence in locating development wells and in predicting recoverable reserves and initial flow rate for each well.
TCEI has used the same 3-D survey to identify the locations for the initial five West Black Lake wells. The remainder of the West Black Lake development area is defined by 2-D data, which will be replaced with 3-D data before expanding drilling into that area.
In common with many other limestone hosted gas fields, gas from this play has small amounts of deleterious gases (mainly carbon dioxide) but these are readily removed using established technology at low cost (35c/MCF contract removal cost in the West Black Lake area).
A short pipeline will be required to connect West Black Lake production to a nearby facility to process the gas. Additionally a new 3D seismic acquisition survey is being planned to define further reserves and drilling locations.
Contact
AURORA OIL & GAS
Alex Neuling
COMPANY SECRETARY
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