Re: Valhalla-1 Exploration Well SuspendedARC Energy Limited...

Re: Valhalla-1 Exploration Well Suspended
ARC Energy Limited advises that operations at the Valhalla-1 ST1 exploration well, operated by
ARC Energy and located in the onshore Canning Basin Permit EP 371, have been suspended
due to deteriorating well borehole conditions. A cement plug will be placed at the 244mm
casing shoe allowing for a future sidetrack and further evaluation of the encouraging results to
date from drilling the Valhalla prospect.
Fishing operations to retrieve the previously reported severed drill string encountered additional
borehole stability problems. An attempt was also made to run wireline logs to the top of the
parted drill string, but logging tools could not pass below the top of the Anderson Formation at
around 1700 metres.
Since borehole conditions have deteriorated to a point where no further logging or testing is
possible, the decision has been made to abandon the current hole drilled to a total depth of
3466m and suspend the Valhalla well at the casing shoe depth of around 900 metres.
Completion of wireline logging was a prerequisite for proposed drill stem testing of three
hydrocarbon show intervals in sandstones of the Anderson Formation and Fairfield Group.
While the inability to test the current well is disappointing, the presence of numerous oil and gas
shows, and anomalous log responses sufficient to support proposed drill stem testing across
three geologically separate intervals, in the Valhalla well are very encouraging for future
exploration in EP371.
The well bore stability and drilling problems encountered will be further investigated to enable
more efficient future drilling operations in the Valhalla area.
The drilling rig is now being mobilised to the next well in ARC’s Canning Basin exploration
program, the Yulleroo-02 appraisal well location in the western Canning Basin.