Carnarvon Petroleum (ASX:CVN) is tracking encouraging momentum at its Roc-1 oil well offshore Western Australia with a casing cemented in place and drilling at a depth of 3,435 metres starting ahead of prognosis.
The well was spudded late last month in a known oil reservoir of the North West Shelf region, with Carnarvon partner Quadrant Energy - a consortium between Brookfield Asset Management (NYSE:BAM) and Macquarie Capital (ASX:MQG) - acting as operator.
This well follows up last years’ successful Phoenix South-1 oil discovery.
The latest progress sets up ongoing development that is expected to deliver drilling through the final section to a total depth of around 4,750 metres within two weeks.
In a success case wireline logging will take a further five days to be obtained.
Quadrant has also proposed a contingent intermediate logging run at a depth of around 4,000 metres to de-risk data acquisition after drilling through the top reservoir of 3,750 metres in the approximate hole section equivalent to where oil was discovered in Phoenix South-1.
Roc-1 is about 20 kilometres southeast of Phoenix South-1 and around 150 kilometres north of Port Hedland.
Spudding of the well has been carried to US$70 million by Quadrant and 20% partner JX Nippon.
Roc prospectivity
There are grounds for optimism for Roc-1 well as it is a larger structure than Phoenix South residing in a shallower water depth and a shallower reservoir than Phoenix South. It is also up-dip to the Phoenix South structure.
Carnarvon and its joint venture partners are targeting a best-case estimate of 42 million barrels of oil at Roc.
This would represent a substantial portion of the larger Phoenix resource, estimated in a best-case scenario to total 104 million barrels of oil over only 5% of acreage held by Carnarvon.
Success at Roc-1 would see the well suspended then re-entry for evaluation and further testing (including flow testing) and coring in the third quarter of 2016.
Analysis
The systematic progress at Roc is encouraging as it reinforces Carnarvon's initial confidence that the well is well placed to access the same Lower Keraudren reservoir in which oil was discovered in the 2014 Phoenix South-1 well.
Potentially value-adding newsflow for the company would be delivered in the coming weeks as drilling continues to its maximum depth and further efforts to de-risk the project take shape.
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