CANBERRA: Karoon Gas Australia Ltd is pleased to announce the company has received written notification from the Brazilian oil and gas regulator, the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis, advising that the revised Appraisal Plan (‘PAD’) for Karoon’s 65% owned Santos Basin blocks S-M-1037, S-M-1101, S-M-1102, S-M-1165 and S-M-1166 has been approved.
The revised PAD specifies the minimum firm and contingent work program commitments required to be completed to satisfy the joint venture’s obligations under the concession agreement. This is an important milestone for Karoon as it paves the way for the joint venture to finalise and prepare for the forward work program in the Santos Basin Brazil as follows: The appraisal drilling of the Echidna and Kangaroo light oil discoveries is expected to provide greater resource certainty.
While the firm work program commitments are to be completed by 31st December 2018, Karoon expects to commence the appraisal drilling of the Echidna light oil discovery during 2016. The PAD provides Karoon significant flexibility with respect to the timing of capital expenditure. Karoon expects to install an Early Production System on the Echidna field contingent upon continued appraisal drill success at Echidna.
An EPS will likely consist of 2 or more production wells which are expected to provide vital technical information about reservoir production performance and would form the basis for commencement of a full field development. An EPS at Echnidna would provide an important analogue for understanding Kangaroo and other similar oil accumulations in the Blocks.
The new 3D seismic survey included in the PAD will allow better risking and ranking of other prospects in the Blocks. It is expected, that upon exploration and appraisal success additional resource would be tied back to a centrally located floating production, storage and off?loading vessel. There is significant flexibility with respect to timing and location for the forward drilling program.
