Santos confirms major oil and gas resource in Dorado

Australian energy giant Santos has informed that the Dorado-2 appraisal well has confirmed a major oil and gas resource in the Bedout Basin, offshore Western Australia, which significantly de-risks a future development.

The Dorado-2 appraisal well, located in WA-437-P, was spud at the beginning of May 2019, using the Noble Tom Prosser jack-up rig.

Santos is the operator of WA-437-P with an 80% interest and Carnarvon Petroleum is its partner with a 20% interest.

The well was drilled down-dip approximately two kilometers from the Dorado-1 discovery and encountered 85 meters of net reservoir in the primary Caley Formation.

Santos said on Thursday that, as expected, an oilwater contact was intersected at 4,003 meters measured depth, with 40 meters of net oil pay encountered. An additional 11 meters of pay was encountered in the Upper Caley sands. Preliminary wellsite analysis indicates this upper zone is oil-bearing, but is subject to further analysis to confirm the hydrocarbon phase.

Santos added that a further 32 meters of net pay was encountered in the underlying Baxter and Milne sandstones, with no fluid contacts intersected. Both sands are currently interpreted to be gas bearing, although similar to the Upper Caley, the Milne hydrocarbons will require further analysis to confirm the hydrocarbon phase. The well result has increased confidence in the presence of large hydrocarbon columns in the Baxter and Milne reservoirs, which should result in a significant increase in gas resources relative to pre-drill estimates, said Santos.

Wireline pressure testing has confirmed that all the reservoirs are in pressure communication with the equivalent intervals in Dorado-1, mitigating one of the key pre-drill risks to a future development. Hydrocarbons have also been recovered from each reservoir interval via wireline sampling. Initial indications are that fluid compositions are similar to the light oils and gases that were sampled in Dorado-1, where condensate yields ranged from 190 to 245 barrels per million standard cubic feet in the Upper Caley, Crespin and Milne Formations, and from 70 to 90 barrels per million standard cubic feet in the Baxter Formation.

Dorado discovery ‘larger than anticipated’

Santos Managing Director and Chief Executive Officer Kevin Gallagher said: “This is a great result which indicates the Dorado discovery is larger than anticipated and which significantly de-risks a future development.”

“The value of the discovery is greatly enhanced by the high quality reservoirs and fluids and the shallow-water setting, which should facilitate a cost-competitive development,” Gallagher said.

“Dorado opens a new basin with high prospectivity in permits where Santos has a high equity position and rich exploration inventory with potential to substantially grow the resource base.”

“Acquisition of a major new seismic survey, the Keraudren 3D survey, is in progress to mature additional exploration opportunities for drilling along this significant hydrocarbon resource play,” Gallagher said.

Once wireline logging operations are completed, the well will be plugged and abandoned as planned, and the rig will move to the Roc South-1 exploration well before returning to drill Dorado-3.

Carnarvon Managing Director Adrian Cook said: “The Dorado-2 well was very important to Carnarvon because of its potential to transition the company into a significant producer in the future. This highly successful result makes this a very tangible reality.

“Dorado has been proven to be a world class resource, located in an ideal jurisdiction and operated by a quality partner. The Joint Venture can now confidently continue with its plans for a fast-tracked Caley oil development and a more substantial full field development, which is expected to incorporate the Roc discovery, on a staged basis.

“Overall, I’m very pleased with the result from this well and incredibly excited for the future of our company.”

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