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Sacramento Gas Basin Alvares Gas Discovery

Project Summary

Location:
West flank of Northern Sacramento Gas Basin (on trend from the Tulainyo Gas Discovery)
Project Size:
Approx 6,000 acres (24 square kilometers)
Joint Venture Partners:
  • Sacgasco Limited (Operator) 39.00%
  • Empyrean Energy PLC 25.00%
  • Xstate Resources Limited 21.00%
  • Pancontinental Oil & Gas NL 15.00%

 Via subsidiary Bombora Natural Gas LLC

Geology:
A large (over 16km²) faulted anticline structure in a frontal fold setting on the west flank of the Sacramento Gas Basin. On geological trend and north of the Tulainyo Gas Discovery. As at Tulainyo, the highly tectonised geological environment makes effective drilling challenging, often requiring very high mud weights to maintain the borehole when drilling and to hold back gas under apparent, high pressure.

The Alvares-1 drilled in 1982 had extensive high gas shows in the Early Cretaceous Stoney Creek Formation. A thick sequence of sandstones, silt and conglomerates were penetrated in the well below 8,300 feet (2,530 metres) with gas shows extending over some 1,500m that were either not tested or improperly tested in the original discovery well.

The gas reservoirs are interpreted from E-log, core, cuttings and test data to have fair to moderate reservoir quality and are older than the Early Cretaceous reservoirs encountered in the Tulainyo-1 well program. Despite at least 3 gas columns being present in the original well, mechanical conditions prevented valid flow testing although a partially successful test did flow good quality dry gas at 0.4 MMcfd to surface.

A more recent reservoir engineering review of the well results indicates that natural flow of between 4.0 and 10.0MMcfd could be achievable from these reservoirs if drilled and completed optimally, using modern technology.

The Alvares Gas Project is also located in the Sacramento Gas Basin, California. Bombora Natural Energy Pty Ltd (Pancontinental’s subsidiary) has entered into a farmin agreement with Sacgasco Limited and Xstate Resources Limited whereby Bombora has the right to earn a 10% working interest by funding 13.33% of the next well on the 1982 Alvares gas discovery.

Bombora has also exercised an option to earn a further 5% in Alvares, by funding Sacgasco’s share of a re-entry of the discovery well to assess it for a possible sidetrack to the gas reservoirs instead of requiring a more expensive new well from the surface. A sidetrack could significantly reduce the cost of testing the gas zones. The promoted component of Bombora’s cost to earn its extra interest would be capped at circa US$200,000.

The Alvares Joint Venture does not have a licence – required commitment to drill the well and is therefore in the advantageous position of being able to make a decision after reviewing information obtained from other relevant drilling programmes in the Sacramento Basin that are in progress for 2017.

Alvares-1 was drilled to a total depth of 4,380m (14,060 feet) to test the Early Cretaceous age, Stoney Creek Formation targeting at the time, oil. This formation is part of an early, marine basin fill and is comprised of sandstones and conglomerates interspersed with clay rich rocks. Wireline log data from the well indicates extensive zones with conventional gas reservoir potential.

Alvares-1 encountered high pressures, along with strong gas shows (up to 10,000 units in one untested zone) recorded over more than 1,500m (4,815 feet) below a thick, sealing shale at 2,531m (8304 feet). Operational issues resulted in an incomplete suite of wireline log data with which to evaluate the results. Pancontinental believes that with careful well planning, application of modern techniques and equipment commonly used in similar geologic settings, an Alvares-2 well has a high probability of commercial success.

The key risk associated with the project, is execution of a drilling and completion programme that minimises damage to the reservoirs and allows for effective flow testing of the rocks. It’s a strategic asset that could benefit greatly from the work of other drilling activity in which Pancontinental is participating in the greater play area.

Reservoir Engineering Analysis of Alvares Natural Gas Flow Potential

Forward Programme

No immediate work is planned on Alvares, however the joint venture expects to re-enter the well sometime in the first half of 2018 to determine its suitability for a sidetrack back down to the extensive gas zones intersected in the original well bore.

Contact Us

Level One
10 Ord Street
WEST PERTH WA 6005

T: + 61 8 6363 7090
F: + 61 8 6363 7099

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