A significant gas flow of up to 2 million standard cubic feet per day (MMscf/d) has been achieved from Beach Energy's Holdfast-1 exploratory shale gas well in PEL 218 in the Cooper Basin. Holdfast-1, the first well drilled to examine the shale gas potential of the thick Roseneath-Epsilon-Murteree shale sequence in the Cooper Basin, is a vertical data gathering well that was recently flow stimulated in seven stages.

Hot water, steam and low levels of gas started to flow from the well on 1 July upon the commencement of post-stimulation clean-up activities. Late on Friday 8 July the flow was diverted through on-site separation equipment to more reliably measure the gas and stimulation fluid rates. With separation of the gas from the returning stimulation fluid the gas flare was successfully ignited. The gas flow rates, now measured, have remained steady at around 1.8 MMscf/d.

Beach regards the flow rates as significant, given the potential for higher flow rates from future horizontal wells. Follow up wells are planned to be drilled to target the optimal producing zone identified by the extensive coring, stimulation and testing program which has been undertaken by Beach in the Nappamerri Trough.

Beach managing director, Reg Nelson, said, "We are delighted and excited by this initial flow rate from Holdfast-1. So far the results give us confidence that these shale target zones, which underlie the conventional oil and gas bearing formations in the Cooper Basin, will significantly increase the natural gas potential of this area. It is still early days but this flow rate looks to be very significant."

Mr Nelson added, 'While these results are preliminary at this stage, it does suggest that significantly larger flow rates may be achievable in an optimally designed, pilot horizontal well. Holdfast-1 was deliberately designed to allow us to experiment with different stimulation techniques and to test different zones within a thick sequence of shales and other lithologies to determine which approach could be applied for the best results when designing a pilot production well.'

Beach previously reported the flow stimulation of the Holdfast-1 well had been completed successfully with the various selected target zones fracturing vertically, in line with expectations. The vertical nature of the induced fracturing augurs well for future horizontal production wells.

A variety of well perforation techniques, fluid viscosity and proppant sizes was used in the stimulation of Holdfast-1 to provide a range of information on the response and performance of the different shale and tight rock zones intersected in the Permian aged section of the well. This approach is intended to identify which techniques are best suited to the pilot production program set down for 2012. This program will consist of two horizontal wells, one at each location.

The flow stimulation of Holdfast-1 was undertaken in seven stages, targeting the primary target zones of the Roseneath Shale (two stages), the Epsilon Formation (three stages) and the Murteree Shale (one stage), as well as a deeper secondary zone, the Patchawarra Formation (one stage).

Mr Nelson said: "While we are greatly excited by the results from the Holdfast-1 well to date, we are not surprised by them. Beach has applied an extremely thorough and detailed technical approach over the past few years to its shale gas research, which identified the Cooper Basin, and more particularly the Nappamerri Trough, as one of the most prospective shale gas provinces in Australia. Beach has been a pioneer of shale gas exploration in Australia and is now best placed to lead the development of the shale gas industry through its accumulated expertise, its acknowledged competence as an operator and the fact that the Cooper Basin has well established infrastructure in place to assist in commercialisation of this opportunity."

Participants in PEL 218 (Permian JV) are: Beach (Operator) 90%; Adelaide Energy 10%.

Beach is pioneering the exploration and potential development of shale gas in Australia and is the first company to undertake a systematic and targeted shale gas program in the Cooper Basin.

The Cooper Basin is the most prolific onshore petroleum province in Australia, having produced approx. 6 Tcf of gas to date, and is ideally situated as it has the necessary infrastructure for the delivery of oil and gas to the Eastern Australian markets. Within the Cooper Basin, Beach currently holds interests of approximately 20% of the SACB JV (Santos operated), this includes infrastructure such as the Moomba production facility, approx. 23% of the SWQ JV (Santos operated) as well as various oil interests of between 40-75% on the Western Flank of the Cooper Basin.

Tags: Beach Energy