2 Feb 2007drilling progress report▼ Bad
Megascolides-2 is being plugged. Karoon is reviewing results before deciding on the third well, Raniformis-1, and has postponed that decision about five weeks. The rig moves to other Victorian locations.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
31 Jan 2007drilling result▼ BadMajor
Megascolides-2 reached 2130m total depth with no commercially significant hydrocarbon shows, including in deeper reservoirs, and will be plugged and abandoned. A second dry hole for the Gippsland program.
5 Jan 2007drilling spud● Neutral
Karoon spudded Megascolides-2, the second Gippsland well, on 4 January 2007, near the crest of the Megascolides structure. Its target is more than 200m shallower than Megascolides-1, where better rock quality is hoped for.
28 Dec 2006drilling result▼ BadMajor
The Megascolides-1 sidetrack showed good oil staining but very low permeability, so it is being plugged and abandoned. This is a disappointing result for the follow-up to the 2004 oil zone. Megascolides-2 is next, with potential for 2.5 million barrels.
14 Dec 2006drilling spud● NeutralMajor
Karoon spudded the first of three Gippsland wells on 13 December 2006 on the 100%-owned PEP 162. It is a re-entry and sidetrack of Megascolides-1, which in 2004 found a ten-metre oil-bearing zone that was never flow tested.
1 Nov 2006drilling scheduled▲ Good
Drilling contract with Century Drilling signed for the three-well onshore Gippsland program, starting mid-November 2006, with rig mobilisation begun. Three prospects of about 3 million barrels each are ready; minimum economic size is 500,000 barrels. Follows the 2004 Megascolides-1 oil shows.
9 Oct 2006farm in farm out agreement▲ GoodMajor
Karoon farms out up to 60% of Browse permits WA-314-P and WA-315-P to ConocoPhillips: 51% for US$9.6m reimbursement plus 80% of the third-year program, with one well per permit estimated at US$60–80m. ConocoPhillips can earn a further 9% by funding 80% of the next US$125m. This resolves the long-running farm-out search.
3 Oct 2006farm in farm out agreement▲ Good
Karoon says it is finalising Browse farm-in arrangements for WA-314-P and WA-315-P with interested parties, and expects a board decision to be announced shortly. No terms are given yet.
3 Aug 2006drilling progress report▲ Good
The last Browse 3D survey finished under budget, completing and exceeding the Year 2 commitments. Early interpretation confirms the Updip Buffon and A Lead sizes. Data rooms for farm-out are booked to end August. A letter of intent was signed with Century Drilling for Rig 11 for a November 2006 Gippsland start, and Lino Barro joins as Engineering Manager.
21 June 2006resource reserve update▲ Good
Gippsland update: 10 leads identified, four of them worked up for drilling, each estimated at 2.5–3.5 million barrels. Karoon says a 3 million barrel field could be worth about A$25/barrel NPV, and a drilling program is expected to start in Q1 2007, using Upstream Petroleum to secure a rig. Browse 3D is due mid-July.
9 May 2006resource reserve update▲ Good
Initial Gippsland 2D seismic interpretation shows ten leads, three of them being worked up for drilling, each with roughly 3 million barrels of potential recoverable oil. Karoon is seeking a rig and reports considerable interest in the Browse farm-out.
15 Feb 2006drilling progress report● Neutral
Weather and ship maintenance have pushed the remaining Browse seismic to late April–May 2006. Farm-out has moved to talks with a short list of companies. Gippsland seismic processing shows early encouraging signs of several structures.
3 Jan 2006drilling progress report▲ Good
First-stage 3D seismic over Browse Basin permits WA-314-P and WA-315-P finished on schedule and under budget; a second stage of 286 sq km 3D and 845 sq km 2D is due to start late January 2006. Karoon expects a farm-in agreement early in 2006.