Salamander Energy plc announces South Kecapi-1 DIR/ST oil and gas discovery

Monday, Feb 04, 2013

Salamander Energy plc announces that the South Kecapi-1 DIR/ST exploration well ("SK-1") in the Bontang PSC has been completed as an oil and gas discovery.  South Kecapi is the first well in Salamander's multi-well programme in the North Kutei basin.

SK-1 discovered a combined 40 m of net oil and gas pay in high quality stacked Pliocene channel sandstones. A drill stem test ("DST") was conducted within one of the well's primary targets; a well-developed, Pliocene-age channel sandstone, which flowed light oil at a rate of c. 6,000 barrels of oil per day (constrained by testing equipment) and 8 MMscf per day of gas.  The well is being plugged and abandoned as an oil and gas discovery.

SK-1 was drilled using the Ocean General semi-submersible rig, reaching a total depth ("TD") of 2,102 m true vertical depth sub-sea ("TVDSS"). Higher pressures than anticipated and numerous gas kicks were encountered throughout the early Pliocene section which is believed to be indicative of a hydrocarbon-charging system that is extremely active.

Primary Targets (BT45 and BT50 channels)

The well encountered 11 metres of net oil pay in high quality early Pliocene channel sandstones (BT45) which represent the upper primary target of the well at 1,722 m TVDSS. A DST was conducted across a five metre interval of the oil-bearing reservoir which flowed at a rate of c. 6,000 bopd on a 52/64" choke, without any produced water. The oil is a light, sweet 33.4 degree API crude with a GOR of 1,333 scf/bbl.

Wire-line and pressure data have confirmed the presence of an oil-water contact within these well-developed channel sandstones. The lower primary Upper Miocene target (BT50) was found to have limited sand development at this location.

Secondary Targets (BT18 - BT25 channels)

In the shallowest target, the BT18, the well found three channel sandstones each with gas to base totalling 24 m of net pay. In the BT25 target a 5 m thick sand channel with gas to base was encountered.

A full evaluation suite of pressure and fluid sampling together with wire-line log analysis and collection of gas samples provides evidence for excellent quality reservoir characteristics, with porosities exceeding 30 % and excellent gas mobilities within these sandstone sequences. 

In addition, two long sections of thin-bedded pay were encountered in the shallow section of the well. A micro-resistivity log was run, indicating a significant potential net pay addition. Further work is on-going to determine the resource potential of these zones.

Resource Potential

Work is currently underway to confirm the range of volume of discovered resource. Salamander does not believe the gas resource discovered in the main channels necessarily represents a commercial volume on a stand-alone basis and work continues to define the additional resource potential of the thinner sands. However, with light oil discovered at South Kecapi in well-developed, high quality reservoir on the down dip, western flank of the large Bedug structure, there is a material upside case for both oil and gas.

The crest of the Bedug structure lies 4 km east and 500 m up-dip of the SK-1 well location and the initial view of the range of potential recoverable oil resource discovered in the BT45 primary target reservoir alone is between 13 MMbbl and 133 MMbbl. Further appraisal of this interval, together with the drilling of additional target channel sequences with the Bedug-1 exploration well will help further define resources.

Source: Salamander Energy plc

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