We attach herewith an ASX Announcement for Investors pertaining to the Joint Venture approval of the Permit Year 3 work programme and budget for EP437 in the Perth Basin and the receipt of a $200,000 Exploration Incentive Scheme grant.
Key Petroleum Limited (ASX:KEY), on behalf of its wholly owned subsidiary Key Petroleum (Australia) Pty Ltd (“Key”), is pleased to announce that it has received budget approval from its Joint Venture partners Rey Oil and Gas Perth Pty Ltd and Pilot Energy Limited for the EP437 Permit Year 3 work programme and budget which includes drilling of the Wye Knot commitment well. The Joint Venture has also received notification from the Department of Mines and Petroleum (“DMP”) that it has been successful in its application for a $200,000 Exploration Incentive Scheme grant which will be applied against the cost of the well. The anticipated budget for the well is $1.9 million before applying the exploration incentive scheme grant. Study work undertaken over the last few months involved a comprehensive review of wells in the vicinity of the Wye area and an updated geophysical mapping study of the Wye area (eastern part of the permit). Gas encountered in the Wye-1 discovery well is dry, and compares well to the dry gas at the Dongara oil and gas field directly south which is not in equilibrium with the Dongara oil. The gas is likely generated largely from the Irwin River Coal measures, and the oil is likely sourced from the Lower Triassic Kockatea Shale. In the Dongara Field, an oil leg was eventually found in the Dongara-8 well which flowed at 800 barrels of oil per day, some 3 years after the initial gas was flowed at 10 mmscf/d. The Dongara oil column was established with a height of 22 metres below a gas cap of 122 metres. This and later exploration successes, including the Hovea field establish a dual charge model (oil charge first then later gas charge) for the North Perth Basin area. Similar (Kockatea sourced) oils have been found in wells with shows to the north (Connolly-1 and Condor-1), updip from the Wye-1 migration path. The combined results of the work supported drilling of the Wye Knot Prospect, which is positioned a step out distance sufficient enough to investigate the potential for an oil leg below the gas pay encountered in Wye-1 in the Triassic Bookara and Arranoo sands but also sufficiently test the potential of the Permian sequence which was not intersected at Wye-1. This step out location is at a distance which suggests the gas cap does not extend outward from Wye-1 at a depth greater than 650 metres subsea. Key confirms the prospective resources of the Triassic interval, incorporating the Arranoo potential within the Kockatea Formation, as follows. Please note the below resources do not include the Permian section which are currently being assessed and will be presented in coming weeks.
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