Challis flow revives Timor oil hopes

Press, 3 November 1984, Page 25

Challis flow revives Timor oil hopes

NZPA-AAP Melbourne BHP’s announcement this week of a stabilised 4700 barrel per day oil flow from the Challis 1 exploration well has been welcomed by analysts as a promising sign of things to come from the Challis field, near Jabiru in permit area NT/P26 of the Timor Sea.

Speculation about the fate of the Timor Sea oilfields has been further heightened with with Robert Holmes a Court’s Weeks Australia releasing its quarterly report.

Weeks Australia says that although no decision had yet been made about Jabiru production, it anticipates the Jabiru oil reserves will be adequate to “justify a modest development”. Weeks Australia, which has a 10.31 per cent interest in the field, says the joint partners in NT/P26 would be meeting soon to receive BHP’s recommendations on its development. BHP, which has a 50 per cent interest in NT/P26 through its wholly-owned subsidiary BHP Petroleum, is conducting the exploration on behalf of the seven joint venture partners. - BHP says in a brief statement to the Melbourne Stock Exchange that Challis

1 flowed oil at a stabilised rate of 4700 barrels per day through a 7/8 inch choke with a flowing tubing head pressure of 500 pounds per square inch. The stabilised flow rate was established after production testing at the interval 1391.5 to 1403.5 metres.

The well was then shut in to allow for pressure buildup, and BHP reports a a 5000 barrel-per-day test flow was made after that. Analysts say it is too early for the Challis flow to have any major effect on share prices but they describe the news as welcome, particularly after the disappointments of the Jabiru field.

They say Challis 1 is the most promising wildcat well in the area since Jabiru-lA, about 24km away but in a different geological structure, produced 17,000 barrels over three days in September last year. Analysts say there is no close link between the Challis flow and any recommendation to go ahead with Jabiru field production although the partners would definitely take Challis into account when considering tanker transport and the necessary on-site production facilities.

BHP officials would not go beyond the company’s brief statement, apparently confirming claims by analysts that the company is anxious to guard information in view of the Federal Government’s plans to introduce cash bidding for the Timor Sea acreage not yet allocated for exploration. Analysts say the Challis flow and a possible Jabiru production development make Timor oil permit areas “hot property” with the advantage obviously going to the joint venturers with inside geological information.

Jabiru 4 was plugged and abandoned after producing only 90 barrels a day and. its predecessors, Jabiru 2 and 3 and the two wildcat wells, Eclipse 1 and Pollard 1, were also regarded as failures.

Weeks Australia, although optimistic the Jabiru field has some commercial potential, has described the over-all Jabiru appraisal drilling as a continuing disappointment. Initial estimates of the Jabiru reserves ranged between 200 million and 500 million barrels but now the region is believed to hold about 50 million at the most.