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AUSTRALIA
USA
NEW CALEDONIA
PAPUA NEW GUINEA
EP 413
ONSHORE NORTH PERTH BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM NL INTEREST - 5.2685%
EP 413 covers an area of 539 square kilometres and is situated in the North Perth Basin seven kilometres to the south of the giant 400 billion cubic feet Dongara Gas Field.
Victoria Petroleum NL considers the permit EP 413 to be very prospective and well placed for the presence of oil and gas, an opinion supported by the recent new field oil discovery at Jingemia-1, the Arc Energy Hovea and Eremia oil and gas discoveries 5 kms to the north east and the Roc Oil Cliff Head oil discovery 15 kms to the west in the adjacent offshore permit WA-286-P.
Regional structural mapping indicates a major structural trend and prospect to the west of the permit branching of the Cliff Head structural trend comes onshore to EP 413. Similarly the onshore Hovea structural trap style to the north east of the permit is mapped as present in EP 413 and has been confirmed oil bearing by the recent Jingemia-1 oil discovery.
Jingemia No. 1 intersected an oil column of between 29 and 33 metres in the Dongara Sandstone target in late October 2002 at 2,414 metres, confirmed by subsequent wireline logging and testing.
The first phase of production testing of the Jingemia-1 oil discovery was completed at 0630 hours WST on 24th December 2002 and the well is now shut in until mid January 2003 for long-term pressure build up.
During the 10 day well flow period a total of 18,500 barrels of oil was produced at an average rate of 1,850 barrels of oil per day and trucked to the BP Oil Refinery at Kwinana for sale. No water and a small amount of associated gas were produced during the test. The well oil production rate was constrained at times to maximise the amount of information obtained from the test, however flow rates of up to 2050 barrels of oil per day were recorded through a 1 inch choke. Production constraints did not allow for maximum oil flow rate test (above the 2050 barrels per day rate).
Pressure measurements and electric wireline log data have confirmed that a single oil column of at least 29 metres, most likely up to 33 metres, is present in the well, and that commencing at 2,419.9 metres, the well intersected 34 metres of Dongara Sandstone of which 32 metres is interpreted as being of good to excellent reservoir quality. This overlies an additional 43 metres of poorer quality Wagina Formation.
The down-hole pressure gauge records of the initial production tests were retrieved in March 2003. Analysis of these flow test and build up data indicated very good reservoir characteristics.
After considerable delays, Government approvals have now been obtained to complete the installation and construction of fluid separators, oil storage tanks, load-out facilities, road and other associated items so as to commence an initial 3 month extended production test program. These tests will further evaluate the field in preparation for commercial production and provide longer term production history that will justify additional appraisal and development drilling on the field later this year.
These extended production tests are scheduled to commence in the first week of May 2003.
Flow rates of approximately 2000 barrels of oil per day will be targeted during the extended production test period, with Victoria Petroleum during cashflow from the test oil being sold to the BP Refinery, 350 kilometres to the south at Kwinana.
Based on the January 2002 seismic survey and subsequent interpretation and mapping subsequent to the drilling of Jingemia-1, the Jingemia Oil Field is interpreted to have the potential to contain a mean recoverable oil reserve of 5 million barrels.
Adjacent to the Jingemia Oil discovery, additional prospects, Drover and Moorba have been mapped and form additional attractive exploration targets.
Additional prospects and leads in the southern part of the permit, Freshwater Point North and Stockyard are interpreted from seismic and adjacent drilling data to have the potential to contain mean recoverable reserves of 38 million barrels of oil and 42 billion cubic feet of gas, if oil and gas are present. The Freshwater Point North Prospect is considered to be an onshore extension of the offshore Cliff Head-Vindara trend.
These leads are already the subject of exploration activities with a pilot airborne gravity survey being flown to assist in defining the extent of these and other leads in the areas of future seismic acquisitions.
Victoria Petroleum NL considers it has a prospective permit in the North Perth Basin, in an exciting reemergent area of exploration activity surrounded by the significant offshore Cliff Head and onshore Hovea and Eremia oil and gas discoveries and associated infrastructure, and within the permit, the recent Jingemia oil field discovery.
Victoria Petroleum NL is encouraged by the 100% wildcat exploration success rate in this resurgent phase of drilling in the Northern Perth Basin with all three wells drilled being oil discoveries.
Origin Energy is the Operator of EP 413.
The Jingemia oil discovery, even though the Company has a relatively modest equity, is of considerable value as it elevates Victoria Petroleum into the ranks of Australia oil producers with the associated cashflow.
WA-254-P
OFFSHORE CARNARVON BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST - 9.31% (Part 2), 6.17% (Parts 1, 3 & 4)
The permit comprises four graticular blocks of 322 square kilometres in area on the Legendre Fault trend in the offshore Carnarvon Basin.
In April 1999 the Sage block provided Victoria Petroleum NL's first offshore oil discovery Sage-1, with the testing of 2,155 barrels of 48.8 degree API oil per day.
An initial review of the Sage Prospect by Operator Apache Energy concluded that the mean oil reserve was 3.8 million barrels of oil, which despite the current oil price is still below the economic threshold for a stand-alone development of 5 million barrels. An independent seismic interpretation and velocity model indicates that the Sage Prospect may have the potential to contain up to 26 million barrels of oil.
Subsequent seismic reprocessing and interpretation indicates the Sage Oil Discovery to have a potential recoverable oil reserve of between 8.3 nd 13.4 million barrels. The potential also remains for a Sage Oil Field tie-in to any nearby development in WA-254-P Part 2 or adjacent permits, should a significant discovery be made in those areas.
Additional prospects generated over the year include the Kleopatra Prospect, the Cerebus Prospect, the Collier Prospect and a number of additional leads that require additional work.
Interpretive work by the Operator is being accelerated to reach a drill decision on Sage-2 and the other prospects for a well in the fourth quarter of 2003.
Apache Energy N.L. is the Operator of the WA-254-P Joint Venture.
WA-261-P
OFFSHORE CARNARVON BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST - 12.5%
WA-261-P covering an area of 299 square kilometres in the offshore Carnarvon Basin is located immediately to the south and adjacent to the Apache Energy/Santos Limited permit WA-209-P containing the 45 million barrel Stag Oilfield, currently producing approximately 15,000 barrels of oil per day.
Chamois-1 was drilled in September 2000, targeting the Jurassic Athol and Triassic Mungaroo formations that are becoming prolific producing horizons in the Carnarvon Basin. While the Mungaroo Formation was dry, the Athol Formation contained approximately 6 metres of net oil pay and the M. Australis sandstone contained about 3 metres of net gas pay.
At present this discovery is deemed sub-commercial, but the recovery of oil from the target Jurassic formation provides encouragement that further drilling on the Chamois Prospect may yet result in the discovery of a commercial pool of hydrocarbons in the permit.
A large Stag Sand pinch out trap, south of the 50 million barrel Stag Oilfield was tested by the Ceres-1 well in November 2002. Although only minor oil shows were observed in the Stag sand resulting in the well being abandoned, good oil shows in the Athol sands provide encouragement for the presence of further potential Athol sand oil pools in the permit. Further work is being carried out by the Operator to evaluate future prospects for drilling with Athol sand targets.
The potential for a commercial oil discovery in WA-261-P is enhanced by the proximity of the Stag Oilfield Platform, 22 kilometres to the north east.
Apache Energy is the Operator of the WA-261-P Joint Venture.
WA-312-P
OFFSHORE CARNARVON BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST - 18.3%
WA-312-P is located in the Dampier Sub-basin of the offshore Carnarvon Basin, Northwest Shelf, Western Australia.
Lying approximately 50km to the north of Karratha, the permit comprises 23 graticular blocks over 1850 square kilometres, and is situated less than 1 kilometre south of the 80 million barrels recoverable Wandoo Oil Field, currently producing 24,000 barrels of oil per day, the Hampton-1 gas discovery, and 11 kilometres to the east of the 45 million barrels recoverable Stag Oil Field, currently producing 15,000 barrels of oil per day.
The permit has had only three wells drilled in it and is considered lightly explored given the proximity to the prolific oil and gas fields to the north and west.
The Permit has been granted for a six-year term and the initial three years exploration will be taken up with a program of seismic re-processing and acquisition to mature a drilling target. The WA-312-P Joint Venture has already identified, among the nineteen leads and prospects mapped to date within the Permit, a number of prospects and leads at the Wandoo and Stag oil producing horizons that will be the focus of exploration attention.
The potential size of the target leads range from 5 to 100 million barrels of oil recoverable in an area of favourable infrastructure.
A 3D seismic survey was carried out in the western portion of the permit and has indicated several promising leads and prospects in this area, with the 9 million barrels of oil potential Southeast Wandoo Prospect, 3 kilometres from the Wandoo Platform considered an immediate future drilling candidate for farmout in 2003.
Interpretation of the seismic data acquired during this survey, combined with the existing extensive 2D seismic data base indicates the presence of up to sixteen leads. Eight of the sixteen leads have a cumulative unrisked oil reserve potential of up to 145 million barrels of oil.
Victoria Petroleum NL is the Operator of the WA 312P Joint Venture.
WA 340-P
OFFSHORE CARNARVON BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM NL INTEREST - 20%
During the December 2002 quarter, a consortium consisting of Strike Oil as operator (40.00%), Victoria (20.00%), Pancontinental (20.00%) and Sun Resources (20.00%) tendered on Federal gazettal block WO2-12 which lies southern adjacent to WA-312P. During March quarter 2003 the joint venture was advised of the successful tender. Following acceptance of the tender WA 340P was awarded.
Four Jurassic to Cretaceous age structural stratigraphic leads ranging in size from 19 to 60 million barrels of oil recoverable (P10) are present in the permit. Further work will commence on these leads to upgrade to prospect status for possible drilling in the next one to two years.
Strike Oil NL is the Operator of the WA 340P.
EP 325
OFFSHORE CARNARVON BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST - 60%
EP 325 covers an area of 1,093 square kilometres in the Exmouth Sub-basin of the central Carnarvon Basin and contains the Rivoli Gas Discovery.
The Joint Venture is focussing on the potential for development of the existing and predicted natural gas resources of the Exmouth Gulf. As the Government of Western Australia proceeds with its policy of private electricity generation a market has developed for natural gas in the Cape Range Peninsular to which EP 325, the 9 billion cubic feet Rivoli-1 Gas Discovery and the potential 21 million barrels of oil or 49 billion cubic feet of gas Cooper Prospect are ideally located.
Engineering and economic studies are proceeding to determine the feasibility of development of the Rivoli/Cooper trend to supply natural gas to Exmouth and the region.
Recent geological and geophysical analysis provides confidence that the Cooper Prospect is most likely to be an oil target. Preparations for the drilling of Cooper-1 in the second half of 2003 have commenced and potential farmin partners are now actively being sought to provide Victoria Petroleum with a 15% free carried interest through the drilling of Cooper-1.
Victoria Petroleum NL is the Operator of the EP 325 Joint Venture.
EP 406
CARNARVON BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST - 95%
EP 406 covers an area of 4,750 square kilometres situated in the southern part of the Carnarvon Basin over the Bernier and Dorre Islands, the adjacent eastern area of Shark Bay and onshore area adjacent to the town of Carnarvon.
Victoria Petroleum N.L has an agreement with Pancontinental Oil & Gas N.L, the previous sole permitee whereby Victoria Petroleum N.L has been assigned a 95% interest in the permit and operatorship for free carrying Pancontinental Oil & Gas N.L through the drilling of the first well in the permit.
Victoria Petroleum N.L considers the permit is prospective for hydrocarbons in the Birdrong Sandstone formation and underlying Devonian sequence based on the gas shows recorded in wells drilled onshore adjacent to the permit.
An initial stratigraphic well to test the prospectivity of the Birdrong and Devonian formations in the permit is planned to be drilled in late 2003/early 2004 following receipt of the necessary environmental and EPA government approvals and farmout.
Victoria Petroleum N.L, is the Operator of the EP 406 Joint Venture.
EP 41
CARNARVON BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST - 88.8% (Part 1); 69.6% (Part 2)
EP 41 parts 1 and 2, cover an area of 393 square kilometres situated onshore and partially offshore in the Carnarvon Basin on the Cape Range Peninsula and Exmouth Gulf. The historically significant site of the first major oil flow in Australia, Rough Range-1, recently in commercial production as Rough Range-1B, lies within EP 41 Part 3, adjacent to EP 41 Part 2.
Following the farmin drilling program in EP 41, Part 3, by Empire Oil NL, Victoria now retains a 10% interest in two prospects within EP 41 Part 3, a 69.6% interest in Part 2 and 88.7% interest in Part 1.
Current exploration activity is focused on the offshore portion of EP 41 Part 1, following up potential oil and gas bearing prospects on tend and to the south west of the Rivoli Gas Field, and west of the Cooper Prospect. These prospects and their hydrocarbon target potentials are Rivoli South West (17.5 BCF) and Cooper West (12 million bbls/21 BCF).
Victoria Petroleum NL is the Operator of the EP 41 (Parts 1 & 2) Joint Venture.
EP 359
CARNARVON BASIN, WESTERN AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST- 55.85%
EP 359 covers an area of 1,954 square kilometres situated in the Carnarvon Basin predominantly onshore on the Cape Range Peninsula and partially offshore in the Exmouth Gulf.
The up to 25 million barrel Fiona and up to 15 million barrel Suzanna oil prospects are potential drilling targets in EP 359.
Further evaluation of the drilling targets in EP 359 for farmout and drilling in 2004 is in progress.
The production of oil at Rough Range has highlighted the viability of even small fields in this region to be economic, given the strength of Australian oil prices.
Victoria Petroleum NL is the Operator of the EP 359 Joint Venture.
SOUTH AUSTRALIA
PEL 104
COOPER/EROMANGA BASIN, SOUTH AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST - 80%
Victoria Petroleum NL received advice during the quarter from the Minister for Mineral Resources Development, Petroleum Group, Primary Industries and Resources, South Australia advising that Victoria Petroleum NL was awarded on March 28, 2003 Petroleum Exploration Licence (PEL) 104, previously known as Cooper Basin Block CO99-E, part of the ex-Santos released acreage opened for bidding to the industry in November 1999.
PEL 104 covers an area of 1,069 square kilometres and is immediately adjacent to the Tirrawarra Oil Field, the largest oil field in the Cooper Basin and onshore Australia with estimated recoverable reserves of 70 million barrels of oil and 340 billion cubic feet of gas. The block is also immediately adjacent to the Fly Lake Oil & Gas Field and surrounds the Callabona Jurassic oil field production licence.
PEL 104 is considered highly prospective for a Jurassic and Permian oil and gas in view of its immediate proximity to producing oil and gas fields and the presence of prospective Permian and Jurassic section within the major portion of the block.
Several prospects with Jurassic and Permian target horizons are indicated from preliminary mapping in the block with the chance for a major Permian stratigraphic pinchout trap in the western portion of the block.
The August 2002 Sellicks No. 1 oil discovery by the Beach Petroleum/Cooper Energy consortium 30 kilometres to the south of PEL 104 has provided encouragement for Permian oil potential on the western edge of the Permian Cooper Basin with the reported oil flow on production test of 2,160 barrels of oil per day.
The extensive data base of 2,117 kilometres of 2D seismic and 12 square kilometres of 3D seismic provides a strong initial data base for the delineation of prospects within the block. Only 4 wells have been drilled in the Permit.
Victoria Petroleum NL has bid a firm 3 year work program of 2 wells, 120 kilometres of 2D seismic and 1330 kilometres of seismic reprocessing as part of its firm work program with an overall work program of 5 wells, 270 kilometres of new seismic and 1,550 kilometres of seismic reprocessing.
A further indication of the high prospectivity of PEL 104 for oil and gas is provided by the stong expressions of interest in farming into the block that have already been received from industry participants.
The perceived high prospectivity of the block, interest from industry and March 2003 signing of the Native Title agreement for the block should see two exploration wells being drilled in PEL 104 in late 2003/early 2004, well ahead of the committed work program drilling schedule.
Victoria Petroleum NLs' large equity interest of 80% in this highly prospective Cooper Basin block provides an excellent first entry into the South Australian portion of the Cooper Basin where the latest round of 2002 drilling on Santos released acreage has an 60% oil discovery success rate.
An active exploration drilling program of up to 10 wells planned over the next 9 months for the South Australian part of the Cooper Basin by current successful explorers, Beach Petroleum Limited, Stuart Petroleum Limited and Cooper Energy NL, will further focus the industry's attention on these areas adjacent and in the vicinity of PEL 104.
With the awarding of permit PEL 104, Victoria Petroleum NL now has a significant prospective "core" exploration acreage position in both the South Australian and Queensland portions of the Cooper Eromanga Basin, the Block PEL 104 interest adding to Victoria Petroleum NL's existing interests in south west Queensland in ATP 589P.
Victoria Petroleum NL is the Operator for PEL 104.
QUEENSLAND
ATP 560P
Eromanga Basin, QLD
Victoria Petroleum Interest - McIver Block - 50%
This 100 square kilometre sub block of permit ATP 560P is located in the central Eromanga Basin of southwest Queensland.
Evaluation of the future exploration potential of the prospects in the McIver Block is in progress.
Victoria Petroleum N.L. is the Operator for the McIver Block.
ATP 560P
Eromanga Basin, QLD
Victoria Petroleum Interest - Ueleven Block - 17 %
This 105 square kilometre sub block of permit ATP 560P is located in the central Eromanga Basin of southwest Queensland.
Further evaluation of the prospects and leads in the Ueleven Block is planned by the Operator for the Ueleven Block, Lakes Oil N.L.
ATP 589P
COOPER / EROMANGA BASIN, QUEENSLAND
VICTORIA PETROLEUM N.L. INTERESTS: - 60% (Barcoo Block);
24% (Springfield and Regeleigh Block);
15% (Bright Spot Block)
Victoria Petroleum N.L. has varying interests in ATP 589P in accordance with the relevant farmouts in ATP 589P which covers an area of 15,301 square kilometres in the southwest Queensland portion of the Cooper / Eromanga Basin.
This Cooper / Eromanga Basin Permit is adjacent to the Energy Equity permit containing the 9.4 million cubic feet per day Bunya-1 gas discovery and the Oil Company of Australia 4 million cubic feet per day Thylungra-1 gas and condensate discovery.
Significant Jurassic oil potential has been interpreted to be present in ATP 589P based on the oil shows in the numerous wells drilled in the permit and the extensive seismic data grid. The 30 million barrel potential Barcoo Junction and 36 million barrel potential Moothandella prospects have been interpreted from this data, if oil is present.
Several other prospects and leads identified in ATP 589P (1) adjacent to the Barcoo Junction area and Moothandella are being been evaluated as potential future farmout drilling targets. The completion of the southwest Queensland to Mt. Isa gas pipeline confirm the strategic exploration value of the acreage position that Victoria Petroleum N.L. holds in this area of the Cooper / Eromanga Basin.
This Queensland permit along with the significant interest in PELA 104 in the South Australian portion of the Cooper/Eromanga Basin makes your company a significant player in the newly resurgent Cooper/Eromanga Basin.
A farmout agreement has been entered into with a private company which could see the drilling of the Moothandella and Trinidad North prospects in ATP 589P in 2004 following completion of the current round of Native Title negotiations.
Victoria Petroleum NL is the Operator for the Barcoo Block of ATP 589P, Part 1 and ATP 589P, Part 2.
ATP 333P
BOWEN BASIN, QUEENSLAND
VICTORIA PETROLEUM N.L. INTEREST - 100%
ATP 333P covers an area of 388 square kilometres on the western flank of the Bowen Basin in Queensland. The Reids Dome Gas Field is situated within ATP 333P and based on initial reservoir studies, a reserve of up to 1 billion cubic feet of gas is indicated for the three wells drilled on the Reids Dome Gas Field prior to November 1994.
Victoria Petroleum has resumed as the Operator of ATP 333P Joint Venture, and is planning to work up locations for a two well drilling program following farmout, in the northern part of the Reids Dome in late 2003.
ATP 465P
BOWEN BASIN, QUEENSLAND
VICTORIA PETROLEUM N.L. INTEREST - 5% (PLA 171); 8% (ATP 465P)
ATP 465P (including PLA 171) covers an area of 539 square kilometres within the central portion of the Bowen and Surat basins in Queensland.
Queensland Gas Company Limited (QGC), has drilled two Coalbed Methane (CBM) wells and one core hole in the Walloon Coal Measures of the Cherwondah Anticline, with the drilling of Trafalgar-1, Lawton-1 and the core hole Lawton-2.
Trafalgar No. 1 intersected 19.6 metres of coal within the four upper seams of the Walloon Coal Measures. Testing of the well during drilling produced gas at a rate of 20,000 cubic feet per day (570 cubic metres per day) and water production measured at 360 barrels per day. These results are typical of the initial flows from wells drilled in the Powder River Basin in the USA.
After dewatering, these wells produce significant gas flow rates. Trafalgar No. 1 demonstrated that the coals of the Walloon Coal Measures are gas saturated and the 360 barrels of water production indicates that the coals have good permeability. Gas saturation and good permeability are the essential criteria for successful coalbed methane production.
Lawton-1 had similar results, in which a flow test of interval 129-378m produced gas at rates up to 19,400 cubic feet / day.
Victoria Petroleum NL has a 5-8% contributing carried interest in the QGC drilling program.
Current results indicate the Walloon Coal Measures of ATP 465P/ATP 695P/PLA 171 have the potential to contain 350 billion cubic feet of recoverable Coalbed Methane gas reserves.
Interest in methane gas produced from coal deposits is increasing in Australia, particularly in the Bowen Basin. ATP 465P is adjacent to the Peat Coalbed Methane field which is now producing sales gas into the pipeline linking it to Brisbane markets.
An additional exploration program being carried out in the permit is the drilling and fracture stimulation of the Cherwondah 317 billion cubic feet tight gas field planned for late 2003/early 2004 by farminee partner Ausam Resources.
Victoria Petroleum will have a 4% free carried interest through this program.
Roma Petroleum NL is the Operator of the ATP 465P Joint Venture.
ATP 471P
WERIBONE BLOCK, SURAT BASIN, QUEENSLAND
VICTORIA PETROLEUM N.L. INTEREST - 20.65%
This 12 square kilometre sub-block of the greater ATP 471P located in the Surat Basin in central Queensland contains the Yarrabend-5 gas well, which may be part of the Yarrabend Gas Field in adjacent licences to the north.
Due to recent ownership changes in the Joint Venture, the testing of Yarrabend-5 has been postponed indefinitely.
In the event that commercial rates of gas production are observed for Yarrabend-5, it is expected that the Yarrabend-5 would be tied into the existing production infrastructure and gas pipeline network 1.5 kilometres to the north.
Oil Company of Australia is the Operator in the Weribone Block.
ATP 574P
BOWEN BASIN, QUEENSLAND
VICTORIA PETROLEUM N.L. INTEREST - 18.5% (Walloon Coals); 75% (Remainder)
ATP 574P covers an area of 616 square kilometres within the central and southern portions of the Bowen and Surat Basins in Queensland.
Queensland Gas Company Limited (QGC) drilled two CBM farmin wells, Pinelands-1 and 3, which flowed gas at up to 10,600 cubic feet of gas per day, and the Pinelands-2 core hole to further evaluate the coal absorption properties of the target Walloon Coal Measures.
Victoria Petroleum NL has an 18.75% interest in the QGC drilling program.
QGC's independent experts report of July 2000 states that the Walloon Coal Measures of ATP 574P have the potential to contain 650 billion cubic feet of recoverable coal bed methane gas reserves.
Victoria Petroleum NL retains its 75% interest in the deeper Jurassic and Triassic hydrocarbon potential of the permit as a review of existing well data shows that there may be by-passed oil in an old abandoned well in the permit, Giligulgul-1.
A 15km seismic survey carried out in February 2002 to further define the drilling location for North Giligulgul-1 and the areal extent of the North Giligulgul Prospect, confirms the potential for the prospect to contain up to 16 million barrels of recoverable oil updip from a 1964 Union Oil Co. well with strong oil shows, if oil is present. Drilling of North Giligulgul-1 is planned to commence in August 2003 following the successful January 2003 farmout to a private company.
Victoria Petroleum N.L will have a 30% free carried interest through the drilling of North Giligulgul-1.
Victoria Petroleum NL is the Operator of the ATP 574P Joint Venture, with the CBM drilling program being managed by Queensland Gas Company Limited.
ATP 593P
SURAT / BOWEN BASIN, QUEENSLAND
VICTORIA PETROLEUM N.L. INTEREST - 60%
ATP 593P situated on the western margin of the Surat / Bowen Basin covers an area of 3,930 square kilometres. The primary targets in the permit are structural traps along the Merivale High trend which is the southern extension of the Merivale Fault system, along which the majority of the Denison Trough fields are located. Ten leads and prospects have been mapped along the Merivale High trend with the potential to contain up to 84 million barrels, if hydrocarbons are present.
Interpretation of the existing seismic data in ATP 593P identified the updip Don Juan Prospect as Hutton/Precipice sandstone four way dip closed structures, updip to the immediately adjacent strong residual oil shows in the Hutton / Precipice sandstones of Don Juan-1 and Flaneur-1.
Significant updip potential is considered present, with the Don Juan Prospect interpreted to have the potential to contain up to 4 million barrels of oil, if oil is present.
Victoria Petroleum N.L has entered into a farmin agreement with a private company whereby Victoria Petroleum N.L will have a 24% free carried interest through the drilling of the Don Juan Prospect to be drilled in early June 2003.
Victoria Petroleum NL is the Operator of the ATP 593P Joint Venture.
ATP 608P SURAT BASIN, QUEENSLAND VICTORIA PETROLEUM N.L. INTEREST, 74.22% (Rookwood Block); 60% (Remainder)
The permit covering an area of 6,800 square kilometres is located in the western Surat Basin adjacent to several oil fields and includes the zero edge of the Boxvale sandstone, the primary producing reservoir in the area. Several four way dip closures are mapped and ready for drilling.
A possible untested Boxvale sandstone zone in Rookwood-1 may be present, indicating a potential target of up to 12 million barrels in the Rookwood South Prospect, if oil is present. A redrill of the Rookwood Prospect, Rookwood South-1, is planned for July 2003, under a farmin agreement entered into with a private company. Victoria Petroleum N.L will have a 29.69% free carried interest through the drilling of Rookwood South-1.
Victoria Petroleum NL is the Operator of the ATP 608P Joint Venture.
SOUTH AUSTRALIA
PEL 57
OTWAY BASIN, SOUTH AUSTRALIA
VICTORIA PETROLEUM N.L. INTEREST - 10%
Victoria Petroleum N.L. has a 10% interest in PEL 57 which covers an area of 794 square kilometres in the onshore Otway Basin.
In May 2001, a well called McNamara Park-1 was drilled in the adjacent permit PEL 72 without encountering hydrocarbons.
Exploration has now focussed on the north western portion of the area with the Honans Scrub seismic program of 60 kilometres over the Orana Prospect carried out in the second quarter of 2002.
Origin Energy is the operator of the PEL 57 Joint Venture and the adjacent Katnook/Hazelgrove producing gas fields.
PRA 436 (RENEWAL APPLICATION)
NEW CALEDONIA BASIN, NEW CALEDONIA
VICTORIA PETROLEUM N.L. INTEREST - 33%
The Participants in the PRA 436 exploration effort are currently studying the potential for a second well on the Gouaro Prospect in conjunction with a renewal application over the area.
The first well, Cadart-1, was drilled to a total depth of 1930 metres in January 2000. An open-hole test of the interval 1650-1930 metres produced gas to surface at a rate too small to measure. After a 36-hour flow test, the well bridged off and the gas flow died. Subsequent attempts to sidetrack the well and re-drill the prospective section were unsuccessful and the well was abandoned on 17th February 2000.
A ready market for gas to electricity from 6 million cubic feet per day up to 50 million cubic feet per day potentially increasing to 100 million cubic feet per day in 2003, at attractive gas prices is available for the adjacent industrial and nickel refining operations in New Caledonia.
Victoria Petroleum NL considers the frontier nature of oil and gas exploration in New Caledonia is more than offset by the extremely strong market demand for any locally discovered and produced hydrocarbons to replace the 2 million barrels of diesel and fuel oil imported each year to generate electricity for New Caledonia and the encouraging oil and gas shows and gas flow to surface from the Cadart-1 drilling.
Victoria Petroleum NL is the Operator of the PRA 436 Joint Venture.
PPL 228
PAPUAN BASIN, PAPUA NEW GUINEA
VICTORIA PETROLEUM N.L. INTEREST - 15%
Victoria Petroleum NL has withdrawn from the permit.
Santos Ltd is the Operator of the PPL 228 Joint Venture.
CALIFORNIA
SAN JOAQUIN BASIN
VICTORIA PETROLEUM N.L. INTEREST: 3.75-100%
San Antonio Prospect Development Projects, Salinas Basin
During the year your company participated in the drilling of the San Antonio Prospect which resulted in the discovery of a cumulative net oil bearing interval of 314 metres in the target Vaqueros Sand and Monterey Shale horizons.
Fracture stimulation and testing operations to determine the ability of these target horizons to produce oil to surface at commercial rates are currently in progress. Initial indications are that down hole conditions are favourable for fracture stimulation as shown by the initial oil flow to surface of 120 barrels of oil and cumulative production of 300 barrels of 38° API oil.
Further encouragement for the ability of the San Antonio fracture stimulated horizons to produce greater quantities of oil are provided by the adjacent production of 500 million barrels of oil from the San Ardo Field, 12 kilometres to the north. Any oil and gas produced to surface in the San Antonio well and prospect are commercially very attractive as an oil and gas pipeline runs within 400 metres of the San Antonio-1 well site.
Vallecitos Oil Field Development Project
Initial development drilling on the Vallecitos West development area in was not successful as the Vallecitos West-1 development well was drilled too close to the bounding fault for the West Vallecitos development area.
Your company considers successful development drilling on the relatively shallow western and southern areas of the Vallecitos Oil Field has the potential to increase recoverable oil reserves by up to 5 million barrels and increase oil production at rates up to 1,200 barrels of oil per day assuming a successful 3 well development program.
The next Vallecitos development well is planned to be drilled in the second half of 2003 following a seismic survey in mid 2003. In the event of the discovery of the oil and gas reserves considered to be present in the Vallecitos development area, production from the new development wells can be tied very quickly in to the existing oil production facilities of the Vallecitos Oil Field.
Kingfisher Project
The Kingfisher Prospect drilled in September 2001 by the Kingfisher-1 well, indicated a potentially hydrocarbon bearing zone within the Monterey Formation of 126 metres.
Further confirmation of the hydrocarbon potential of the upper Monterey zone was provided by the wireline logs which had similar characteristics to logs from oil producing Monterey zones on trend to the south.
Based on the very encouraging results obtained from the upper Monterey Formation while drilling Kingfisher No. 1 and post well valuation it is considered that Victoria Petroleum has a potentially significant Monterey Formation hydrocarbon asset. The realisation of the potential oil or gas reserves in the Monterey will require re-entry of the Kingfisher No. 1 well and horizontal drilling and fracture stimulation within the upper Monterey Formation.
Evaluation of the ability of the Monterey Formation in the Kingfisher area to produce gas from fractured horizontally drilled Monterey Formation is currently being provided by the adjacent Monterey horizontal drilling by Tri-Valley Oil & Gas Company at the Sunrise-Mayel No. 2H well which has reported encouraging gas shows.
The Sunrise-Mayel No. 2H was reported successfully fractured in the horizontal well bore drilled within the Lower Monterey Formation. Post-fracture operations flowback commenced in September 2002 with a flow of gas to surface from the Sunrise-Mayel No. 2H well of 2.5 million cubic feet per day.
Although this gas flow from the lower part of the Monterey Formation was not sustained, Tri-Valley Oil & Gas Company encouraged by this initial flow will reenter the Sunrise-Mayel well in early May 2003 and horizontally drill and fracture stimulate an upper Monterey Formation Zone considered to be analogous to the target zone in the Kingfisher well.
Sustainable gas flows from this May 2003 activity will enhanced considerably the industry perceived potential of the Monterey Formation to produce significant commercial flows of gas in this part of the basin in the company's Kingfisher Prospect area and also the adjacent Raven and Condor Prospect areas.
Your company is well positioned in this area of Monterey interest with approximately 9,000 net leasehold acres.
Eagle Oil Pool Development Project
During 2001, drilling of the company's Eagle Oil Pool Development Project resulted in the successful drilling of a 271 metre horizontal well bore leg into the Gatchell Sandstone oil reservoir, oil and gas productive at the rate of 223 barrels of oil per day and 0.7 million cubic feet per day in the initial Mary Bellocchi-1 well drilled in 1986.
Well site analysis indicated an interpreted 90 metres of oil pay to have been drilled. Regrettably technical difficulties encountered while drilling have prevented immediate testing of the interpreted oil pay.
The resumption of completion and testing operation of the suspended horizontal well bore in Eagle No. 1 is planned to take place in mid 2003 or with the completion of the current engineering preparations for Eagle-2, a new re-drill of Eagle-1 after farmout.
The drilling results to date confirm the Eagle Oil Pool Development Project is essentially low risk in geologic nature with the risks being of an engineering nature associated with deep horizontal drilling. The commerciality of the oil and gas reserves present in the Eagle Oil field is dependent on the oil and gas flow rates obtained from horizontal well bores drilled into the field.
The indicated potential recoverable reserve of up to 24 million barrels of oil and 62 billion cubic feet of gas for the Eagle Oil Pool make the Eagle Oil Pool an attractive target.
With the current price of oil around US$25 per barrel (Australia $40 per barrel) and the price of gas in Southern California in excess of US$5.00 per thousand cubic feet (Australian $8.00 per thousand cubic feet), with a strong likelihood of higher gas prices being revisited in the future, commercial success is most likely for any sustained oil and gas flows discovered in any of the wells in the California drilling program.
In order to maximise your compnay's chances of a commercial success, the current California drilling program focus is on "close in" drilling adjacent to proven oil production as in the San Antonio, River and Vallecitos areas.
NON CALIFORNIA AREAS
Victoria Petroleum NL is participating in low risk oil development workovers in Wyoming which have resulted in net oil production to the Company of 50 barrels of oil per day. Further opportunities of this type are being pursued.
Information contained in this report relating to hydrocarbon reserves was compiled by the Managing Director of Victoria Petroleum NL, J. T. Kopcheff, BSc (Hons Eco Geol), MIMM, MPESA, MAAPG, MSPE, who has had 30 years experience in the practice of geology.
Information contained in this report relating to hydrocarbon reserves was compiled by the Managing Director of Victoria Petroleum NL, J. T. Kopcheff, BSc (Hons Eco Geol), MIMM, MPESA, MAAPG, MSPE, who has had 30 years experience in the practice of geology.
Yours faithfully,
JOHN KOPCHEFF
MANAGING DIRECTOR
VICTORIA PETROLEUM N.L.
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