BEACH REPORT INCREASED PRODUCTION, CONTINUED DRILLING SUCCESS, AND PLANS FOR FY2020 EXPLORATION AND DEVELOPMENT IN THE COOPER BASIN, AUSTRALIA
Newport Exploration Ltd. has provided an update on production, drilling activities, and proposed exploration and development on licences in the Cooper basin, Australia, over which the company has a 2.5-per-cent gross overriding royalty (GOR). This information was reported by Beach Energy Ltd. in its "FY2020 First Quarter Activities Report," dated Oct. 28, 2019, and in its "US and Canada Roadshow Presentation," dated Oct. 29, 2019, and reference should be made to Beach's website for interpretation and guidance.
PRODUCTION
Beach report, Western Flank quarterly production was 2.1 MMboe, 7% higher than the prior quarter and was driven by both strong gas and oil production. This is the fifth consecutive quarterly production increase reported by Beach.
Oil
Beach report, gross overage daily oil production from the Western Flank was 19.6 kbbl, up from 18.4 kbbl in the prior quarter. (NOTE: Western Flank includes the Company's GOR licences ex PEL's 91, 106, and 107, as well as licenses ex PEL's 92, 104 and 111, over which the Company does not have a GOR).
Beach-operated oil production increased 10% to 1,483 kboe.
A total of 11 new oil wells were brought online in the quarter, comprising six horizontal producers and five vertical producers.
The three Chiton horizontal oil wells drilled during the quarter on ex PEL 91 were brought on line in September following strong post drill results accelerating >45 kbbls into the quarter.
Artificial lift installations and conversions were undertaken at six wells and the conversion of producing well Bauer-29 on ex PEL 91 from a beam pump to an Electrical Submersible Pump ("ESP") resulted in a production rate of 3,000 bopd, more than double the beam pump rate from the well.
Beach continues to progress oil de-bottlenecking projects on the Western Flank to support the higher rates of oil production.
Gas
Beach report's Western Flank gas production was 514 kboe, 4% higher than prior quarter as the liquids-rich Lowry-3 and Lowry -4 both commenced production into the Middleton facility.
At quarter-end, Beach has four gas wells on the Western Flank that are cased and suspended for future production after the Middleton area ten-well gas drilling campaign added eight gas wells to inventory. Production potential from wells is now in excess of the facility capacity.
DRILLING
Oil
Beach report eleven operated oil development wells drilled at a 100% success rate. This included six horizontal development wells across the Bauer, Chiton and Congony fields in ex PEL 91.
Beach report seven operated oil appraisal wells were drilled across the Bauer, Arno and Hanson fields in ex PEL 91.
Appraisal drilling at Bauer and Chiton on ex PEL 91 successfully identified additional development well locations. This included Beach's first horizontal oil appraisal well, Chiton-8, which was cased and suspended as a future producer, proving the concept of geo-steering horizontal wells to collect appraisal information.
The three Chiton wells, Chiton-6, Chiton-7 and Chiton-8 on ex PEL 91 have resulted in better definition of the structure of the Chiton field, directly influencing the proposed vertical well development campaign currently scheduled for December 2019.
Bauer Southeast-2 and Bauer Southwest-2 appraisal wells on ex PEL 91 were both cased and suspended confirming increased field volume to the south.
Beach report that a key task in FY2020 was to undertake a further round of appraisal drilling at the Bauer field in order to establish the field limit and finalise their full field development program. Beach also report "very positive results at the Bauer Northwest-2 and Bauer North-2 appraisal wells on ex PEL 91, which intersected the McKinley formation six metres and eight metres high to prognosis respectively", and were well above pre-drill expectations. Beach report that re-mapping of the Bauer field will be completed at the end of the appraisal drilling program and that reserves will be updated at the end of FY2020.
Gas
Beach report four gas exploration/appraisal wells finished drilling during the quarter.
In ex PEL 106 successful wells Crockery West-1 and Ralgnal East-1 completed the 10 well Western Flank gas drilling campaign in the Middleton area. Eight wells were cased and suspended for future production.
PROPOSED EXPLORATION AND DEVELOPMENT FOR FY2020
Beach report that a record year of investment and drilling activity is planned for oil in the Western Flank in FY 2020, with approximately AUD $200M to be spent on exploration.
Up to 77 oil wells are proposed; 36 for exploration and appraisal, and 41 development wells (including up to 17 horizontal wells).
Beach propose a continued roll-out of the Bauer appraisal strategy in ex PEL 91, as well as follow-up drilling at Bauer, Hanson and in the Kalladeina-Congony complex.
Four step-out appraisal wells at Bauer discovered an easterly extension to the Bauer field and in FY2020 Beach plan on drilling 8 appraisal wells at Bauer and 15 development wells, including 7 horizontal wells.
Potential further appraisal drilling at Lowry and Middleton is proposed on 3 to 5 prospects as delineated by a Spoondylus 3-D seismic survey to extend the proven stratigraphic play, as well as to test new exploration