Adelaide Energy targets production from Kilanoola South East...

Adelaide Energy targets production from Kilanoola South East Well 1 in South Australia
Friday, April 29, 2011
Adelaide Energy (ASX: ADE) will case and suspend the company onshore Kilanoola South East Well 1 at the PRL 13 tenement in the Otway Basin of South Australia following discovery of producible hydrocarbons.

The company drilled the well to a depth of 1,173 metres, where after two unsucessful drill stem tests which flowed water, black crude oil was recovered following a 1.5 hour flow period.

This equated to 60 barrels of oil per day, with a water cushion. Oil flow increased when the well was shut for a three hour build up period.

A work over rig will install a pump and complete the well. The rig is due for release on Sunday 1 May following the running and cementing of the 7 inch production casing.

Carl Dorsch, managing director, said �we knew oil was there as we had had such encouraging fluorescence shows from 957 metres whilst drilling � it is highly likely there is more movable oil up to this depth giving a good column to work with.

"We consider that the potential for commercial petroleum discoveries in this large and well located Basin are far from �played out� and that the data from ongoing exploration activities, together with sound geo-technical analysis will give rise to many more prospects.�

An existing operations base at the company�s Katnook Project will allow Adelaide to manage oil production from the tenement with low operations costs making the project commercially viable.

Adelaide�s wholly-owned Katnook Gas Plant has a pipeline connection to the national pipeline grid and local gas customers, as well as the company�s Jacaranda Ridge 2 Well.

Earlier this month, the company offered 30 million company shares at $0.14 in a share purchase plan to investors with parcel subscriptions of up to $15,000 concluding Tuesday 3 May.

The money raised will go towards funding shale gas exploration and appraisal programs in South Australia and Queensland.

The company holds minority stakes in joint venture tenements with Beach Energy (ASX: BPT) in the Cooper Basin as well as a JV with Icon Energy (ASX: ICN) in the same region. Adelaide has three minority stake JV tenements in Queensland�s Maryborough Basin with Blue Energy (ASX: BUL) and another JV with Icon in the Surat Basin of Queensland.