paulharris
354 posts.
21/06/15
22:42:27
Post #: 15504627
Recently the question of blue sky was raised. I will share my vision of a particular element of possible blue sky on which I would like to get some discussion going.
This is regarding CTP’s Retention Licenses 3 and 4 (the Ooraminna prospect). The company drilled it for gas in 2010. When Ooraminna 2, was completed it was plugged and abandoned and hardly spoken of since.
However I think that the reason for the silence has been more attributable to the distraction of other matters than caused by the quality or deficiencies of the prospect.
Remember, Ooraminna-2 was spud in July 2010. It reached TVD of 1,622m but quick smart on 7 August 2010 the Rig was deployed to Johnstone West-1 600km away in EP 115. After a promising hole that did not “flow to the surface”, Johnson West 1 was put in cold storage and the rig was rushed off to Surprise 1, about 7 km away, because that looked even better in the light of what had been learned at Johnson West 1.
Surprise 1 went very well but in mid-December 2010 with a discovery appearing to be a comfortable certainty, disaster struck with the monkey board incident. The new year of 2011 dawned with no certainty of discovery, no rig and not much money left in CTP’s treasury. These factors put CTP into near paralysis until November 2011 when the company finally found the capacity to return a rig to Surprise.
Surprise Side-Track 1 was drilled all through December 2011. The new year 2012 ushered in a confirmed discovery in early January 2012. However the whole of 2012 was consumed with the management quarrel, commissioning new management and agreeing the Santos and Total joint ventures. The only field work that CTP did in 2012 was 3D seismic around Surprise. That was completed in late August but the interpretation was not completed until February 2013.
By this time the Ooraminna prospect, as part of EP82, was well and truly under the control of Santos. By September 2013 the company was reporting RL 3 and RL4 in its schedule of tenure but acknowledging that Santos owned 25% of them and was the operator.
With all that going on it is hardly surprising that we heard nothing spectacular about Ooraminna between August 2010 and now. BUT I have a hunch that CTP still believes that the 0.7 Tcf gas targeted in 2010 is still there. It would be fantastic if it was because it is very nicely situated pipeline wise.
What is the basis of my speculation?
The first indication is that after drilling the prospect the well, Ooraminna 2, was plugged and abandoned BUT CTP management applied for Retention Licenses over the prospect. Such licenses cost money and CTP would not have made that commitment if it did not feel there was something there.
The second indication is that CTP management clawed the tenure back from the Santos JV. It has been restored to 100% CTP as at last November 2014. Why would CTP pursue that objective if the 2010 drilling campaign was a flop?
A third factor is that John Heugh’s management team were unwise to devote CTP’s resources to drilling Ooraminna in 2010 in the first place. Really the cost and logistics of that winter drilling campaign in 2010 should have been invested in Johnson West 1 because even if Ooraminna had been a discovery of the attributed 0.7 Tcf gas target, what could they have done with it at that time?
Nothing! It would have been, and would have remained, a stranded discovery. So why would anyone talk it up over these last four years? But they might, if they were optimistic regarding the prospect, work toward lining up the ducks to have them ready for shooting once NEGI becomes a committed project.
These factors, in conjunction with the material quoted below, have led me to the speculative conclusion that the Ooraminna prospect is a valuable prospect. When you run your eye over the quotes below you cannot help but suspect that there is likely to be plenty of gas in the Ooraminna prospect but it must be treated as a tight reservoir and can only be exploited with appropriate fraccing. The structure needs to be loosened up a bit.
These maps show its location and status:
From CTP Home Page:
The white square with the red spot dead centre is Dingo. The Ooraminna prospect area is RLs 3 and 4 sitting to the north east of Dingo.
Now look at this map from CTP’s presentation 3 July 2013:
The square in grey north east of Dingo is RLs 3 and 4 (so shaded to illustrate that it was subject to the Santos JV.
This map (I’m not sure where it came from) shows the Ooraminna prospect area in the same location as where we now see RLs 3 and 4.:
I think CTP takes the “0.7 TCFG potential recoverable” figure in the last map seriously.
Here are the quotes:
From CTP 100930 QAR
“The 2010 Phase Two Programme commenced in July 2010 with the spudding and drilling of Ooraminna-2 on EP 82. ....
“Ooraminna-2 was designed to have a deviated hole section through the main Pioneer Sandstone target in an attempt to intersect an anticipated vertical fracture system. Although structural analysis remains to be completed based on drilling information inclusive of imaging logs, it appears that no significant fractures were intersected in this well. The structural analysis will assist in determining optimal locations for the intersection of fracture systems in other well sections yet to be drilled.
“The Ooraminna-2 well reached a true vertical depth (TVD) of 1,622 m and the MB Century Rig 7 was released on 7 August 2010 to be deployed at the Johnstone West-1 drilling location in EP 115. The drilling of Ooraminna-2 was a “technical success” with a stabilised gas flow to surface of 152,000 cubic feet of gas per day from a tight gas column still under evaluation from a similar zone to the gas zone in Ooraminna-1.
“The total area of the prospect structure may be over 1,000km2 extending in to the contiguous permit application EPA 147 and the Company believes it may have potential for additional exploration and development, possibly employing horizontal drilling and/or fraccing techniques. It is possible that there is potential for free flowing gas without well stimulation from other parts of the prospect remaining virtually unexplored to date.
“The granting of EPA 147 has been initially refused by the Central Land Council but the Company is hopeful of re-commencing negotiations within the moratorium period.”
From: CTP_Annual_Report_2010
“In our current drilling program, the recently completed Ooraminna-2 well encountered gas as expected. However since the well did not intersect any natural fracturing the maximum flow rate was limited to ca 150,000 cu ft. per day and the well was plugged and abandoned. The drilled feature is actually a side lobe of a massive structure immediately to the east, so there is clearly a major upside potential present and your company will be investigating the means whereby commercial production might be established from these unconventional tight reservoirs.....
“.....Ooraminna-2 (EP 82)
“The 2010 Phase Two Programme commenced in July 2010 with the spudding and drilling of Ooraminna-2, a large gas prospect close to Alice Springs which had flowed gas to surface already in a previous well drilled in 1963. The drilling of Ooraminna-2 was a “technical success” with a stablised gas flow to surface of 152,000 cubic feet of gas per day from a tight gas column still under evaluation from a similar zone to the gas zone in Ooraminna-1.
“The total area of the prospect structure may be over 1,000km2 extending in to the contiguous permit application EPA 147 and the Company believes it may have potential for additional exploration and development, possibly employing horizontal drilling and/or fraccing techniques. The granting of EPA 147 has been initially refused by the Central Land Council but the Company is hopeful of re-commencing negotiations within the moratorium period.”
From: CTP_101231_QAR_Ooraminna-2_Info
“Subsequent to drilling the well and within the relevant quarter, gas analyses of samples taken during the drilling of Ooraminna-2 (EP82) showed a helium content of 0.22% and a nitrogen content of 10.5%......”
From: CTP_Annual_Report_2013
“Page 84: INTERESTS IN PETROLEUM PERMITS, AT 17 SEPTEMBER 2013
“EP 82, Amadeus Basin NT, Central 75% Santos 25%
“RL3, RL4, Amadeus Basin NT, Central 75% Santos 25%
My observations:
The schedule of tenements in the AR of 2013 is the 1st occasion on which RLs 3 and 4 were mentioned. And that was (and remains) without explanation. I imagine that the new management assumed that the old management had already informed the market that it proposed to apply for Retention Licenses over the Ooraminna prospect area.
By that time these 2 titles had become part of the Santos JV. When you note (from above) that the gas in this title was found to have a nitrogen content of 10.5%, there is reassurance that 89.5% of the product is likely to be valuable. Moreover it will be transportable via a 6 km pipeline connection.
If all this dot joining is valid and justified (after a bit of fraccing) we might see Ooraminna shaping up as better than Palm Valley if NEGI becomes a reality.
I would appreciate comments.
CTP Price at posting:
9.0¢ Sentiment: Buy Disclosure: Held
