Quarterly Reports 24 July 2000 The Announcements Officer
QUARTERLY REPORT FOR THE PERIOD
FROM 1 APRIL 2000 TO 30 JUNE 2000
AUSTRALIA WA-254-P - OFFSHORE CARNARVON BASIN, During the quarter a renewal application was lodged for WA-254-P. The future work program incorporating follow up at Sage, Argos and newer prospects, overlapping into adjacent blocks, will depend upon the outcome of the renewal application. EP 395 - OFFSHORE CARNARVON BASIN - 11.25%
INTEREST Apache Energy was appointed Operator during the quarter. Oil shows in the Boyd-1 well are yet to be followed up. There is possibility of an updip oil accumulation at a location approximately 2 kilometres to the east of Boyd-1. In addition, a large number of prospects/ leads have been identified on 3D seismic and are likely to form the focus of future exploration. EP 397 - OFFSHORE CARNARVON BASIN - 33.3%
INTEREST FAR has now entered into an agreement to purchase the offshore Panaeus 99 MC3D data over EP 397. Two Triassic aged prospects have been identified within EP 397, namely Banjo (formerly named Bunny) and Rupert. These prospects are at the same geological level as the Gipsy, Rose and Lee discoveries to the north, where drilling successes have been reported. Whilst structuring at this level is complex, the acquisition of the offshore Panaeus 99 MC3D survey over EP 397 should aid in further understanding and promotion of these prospects. EP 104 - CANNING BASIN - 8% INTEREST (10% POINT
TORMENT) A farmout offer has been accepted by the joint venture which proposes initial geological, geophysical and reservoir evaluation studies, which when completed, give the farminee the right to participate in the drilling of one well. UNITED STATES OF AMERICA FAR principally targets natural gas in its programs. Spot natural gas pricing in the USA is at seasonal highs (exceeding US$4.00 per thousand cubic feet). Natural gas storage is currently running at 50 percent of estimated full capacity. South Drew Prospect, Ouachita Parish, Louisiana The Silmon etal #1 well, the first well in the Company's year 2000 multi prospect program in Louisiana, was turned to sales on 8 June 2000 and has been producing up to 1 million cubic feet of gas and 15 barrels of oil per day subject to commissioning problems associated with the fraccing of the well. The well is producing from the primary Vaughn Cotton Valley Sand between 9,568 and 9,580 feet. The secondary D Sand, between 9,332 to 9,374 feet appears gas productive and remains behind pipe.The well is located within the South Drew Field in Ouachita Parish, Louisiana. South Drew Field was discovered in the late 1970's and produces from a strandline Cotton Valley sand covering the majority of North Louisiana. Further wells are planned within the field where subsurface geology, engineering studies and modern fracturing technology support a potential reservoir of 10 billion cubic feet of gas. FAR has a 10 percent working interest in the Silmon #1 well. Other participants are USA based entities including the operator, Goodrich Petroleum Corporation (NYSE). Clear Branch Field, Jackson Parish, North Louisiana The second well in the year 2000 program, the Terry Ewing No. 1 well, spudded on 27 June 2000 using Nabors Rig 409. The well is presently drilling ahead at 10,003 feet after encountering numerous drilling breaks associated with gas while drilling the Hosston formation between 9000 feet and the present depth. The well will continue through the Hosston and will be logged and intermediate casing run prior to drilling the deeper Cotton Valley. Planned total depth is 12,200 feet. The location lies on trend with significant Hosston and Cotton Valley production which blankets a portion of North Louisiana. Hunt Oil discovered the field in 1976 and has produced in excess of 55 billion cubic feet of gas from multiple Hosston reservoirs. Importantly, all of the gas completions within the field were natural and no infill drilling or stimulation has been applied at Clear Branch. Engineering studies suggest significant amounts of producible gas could remain within the Hosston reservoirs and be captured by wells drilled on smaller spacing. In addition the deeper Cotton Valley gives the prospect considerable upside with overall potential being in the 50 plus billion cubic foot range. The test well is designed to evaluate both objectives. Up to five wells may be required to recover the field potential. Modern fracturing technology supports a case for flow rates exceeding 5 million cubic feet of gas per day. A pipeline lies adjacent to the test well location. FAR has a 12.5 percent participation in the Clear Branch project reducing to a 9.375% working interest on completion of the test well. Other interests are held by North American companies including the operator, Rio Bravo Exploration & Production Company Mikeska-Hamill Field Prospect, Austin County, Texas The third well in the year 2000 program, the Schulz-1 well, spudded on 9 July 2000 and is presently drilling ahead at 8,060 feet using Paterson Rig 127. The well is an 8,650-foot test of the Mikeska-Hamill Field Oil Prospect with an expected duration of around 20 days. The Mikeska-Hamill Field is located in Northwestern Austin County. The most significant production in this field is from the Blum No.1 well which was drilled in 1986 and has produced 280,000 barrels of oil from the 8,600 foot Wilcox oil sand. Engineering studies suggest this well is part of a potential reservoir of up to 8.9 million barrels of oil. The Schulz-1 test well will be drilled to evaluate the remaining oil in the Wilcox Oil Sand Reservoir at 8,630 feet. The prospect is a three way dip structure bounded by a fault to the Southeast and is supported by sub surface well control. FAR has a 10 percent interest in the test well and 975 acre lease. Other interests are held by the Operator, Goodrich Petroleum Company (NYSE). Lake Long Prospect, LaFourche Parish, South Louisiana FAR has agreed to participate in the NW Segment Prospect within the Lake Long Field where FAR holds existing producing interests. A well is planned for late next quarter. The prospect will require the drilling of a deviated well to test thirteen Miocene zones, eleven of which are productive in a major field fault block immediately south and adjacent to the NW Segment Fault Block. The southern block has produced 25 million barrels of oil. Plans call for the test well to be drilled from a land location to a true vertical depth of 12,000 feet. The prospect is supported by a modern grid of 3D seismic. A well drilled in 1949 intersected 15 feet of gas bearing sands at the 5,500-foot Sand interval which was not produced at the time. The field is supported by existing infrastructure connected to Columbia Gas Pipeline System. The level of FAR's participation is subject to finalisation of documentation and is expected to be in the order of 15 percent. The Operator of Lake Long is Kriti Exploration, Inc. PAPUA NEW GUINEA PPL 213 - PAPUAN BASIN - 8.67% INTEREST Following earlier regional interpretative studies designed to generate a ranking of prospects and leads, field mapping and spot sampling was conducted during the April/May period. The data is currently being compiled. Depending upon results, further field work over more specific areas may be required prior to the seismic acquisition phase (early 2001). A bias toward oil prospectivity is favoured by the Joint Venture. PPL 202 - PAPUAN BASIN - 12.5% INTEREST The Operator is continuing to assess both geological and geophysical data with an emphasis on identifying oil prone leads in close proximity to infrastructure. During the quarter field work was carried out on leads in the northern portion of the permit. PRODUCTION Oil sales during the quarter totalled 7,769 barrels for an average of 86 barrels of oil per day at an average price of US$26.09 per barrel before production taxes. Gas sales during the quarter totalled 65 million cubic feet for an average of 0.72 million cubic feet per day at an average price of US$2.89 per thousand cubic feet before production taxes. Sales do not include production from the Silmon well. Yours faithfully, MICHAEL EVANS NOTE: In accordance with Chapter 5 of the Listing Rules, the geological information in this report has been reviewed by Terry Barr, a geologist with 20 years experience and a Fellow of AIMM. Mr Barr has given his consent to the information in the form and context in which it appears. |
