PL 18 (Bandanna 10%)
This Production Licence is located along the western margin of the Surat and Bowen Basins in eastern Queensland, where numerous oil and gas discoveries have been made. The licence contains the Yellowbank Creek and Thomby Creek oil fields. Under the terms of a farmin agreement with Brisbane Petroleum, the Company could earn 50% of the production from each of the first two wells by funding 100% of the costs.
The Company subsequently participated in, Yellowbank Creek-4 was located 400 metres west of Yellowbank Creek-2, which produced over 200,000 barrels of oil.
The well was spudded on 23 October 2004 and reached Total Depth (TD) of 1888 metres on 30 October 2004. Yellowbank Creek-4 intersected 6 metres of the objective Triassic Showground Sandstone which is slightly thicker than at Yellowbank Creek -2 and -3. Drill stem tests recovered oil and wireline log evaluation confirmed the presence of oil. The well was subsequently cased for future oil production.
Yellowbank Creek-4 produced oil at modest rates and in March 2006 it was shut in
In view of the modest results and non-commercial nature of the discovery it was decided not to proceed with additional drilling prior to the lapse of the option to earn further interest. The Company however retains a 10% interest in the entire PL 18 area.
The Yellowbank Creek-4 well has remained shut-in and produced no oil during the Reporting Period. As outlined last year the Yellowbank Creek-4 well in PL-18 continued to produce oil on pump until March 14, 2006 when a hole in the production tubing occurred. Before this event treatment to enhance oil recovery had been carried out and oil production had increased modestly to approximately 5 barrels of oil per day (BOPD). However, this rate was slowly declining when production was halted due to the hole in the tubing.
Because this well was only producing at a low rate, and the cost of replacing the broken tubing was far in excess of the anticipated value of oil likely to be produced, the well has remained shut it. It is intended that Enterprise will undertake an engineering review of this well, and a prospectivity review of the overall production licence, during coming months. Enterprise has a 10% interest in PL-18, outside of the existing Yellowbank Creek and Thromby Creek fields and a 50% interest in revenue from Yellowbank Creek-4 (once cost recovery is reached) as a result of its participation in the drilling of Yellowbank Creek-4.