Santos runs out of luck in second Australian well

Australian energy giant Santos has failed to find commercial hydrocarbons in the second exploration well in its campaign offshore Australia, the Apus-1.

The Apus-1 well is located in the WA-437-P exploration permit, around 27 kilometres southwest of the successful Pavo-1 well. The exploration permit is operated by Santos with an 80 per cent interest while Carnarvon Energy holds the remaining 20 per cent interest.

The Pavo well was drilled right before the Apus well and it was announced as a ‘significant’ oil discovery in March 2022. The discovery provides an option for a low-cost tie-back to the first phase of the Dorado development.

Following preparations for the second well in the campaign, Santos started drilling the Apus-1 well, using the Noble tom Prosser jack-up rig, in early April 2022.

As informed by Santos’ partner Carnarvon, by 13 April, the surface conductor was successfully installed in place, the 17 ½” hole was drilled down to section depth of around 932 metres Measured Depth (MD) and the 13 5 /8” casing was set and cemented in place. The well was then drilled ahead in 12 ¼” hole at a depth of approximately 1,470 metres MD.

In an update on Tuesday, Carnarvon informed that, since the last report, the 12 ¼” hole was drilled to around 2,199 metres MD and the 9 5 /8” liner was set and cemented in place. The 8 ½” hole section has been drilled down to a final total depth of around 2,900 metres MD.

According to Carnarvon, excellent quality reservoirs in the Caley and Milne Members were intersected as prognosed. The interpretation from the logging while drilling and mud logging equipment is that, while hydrocarbons were observed in the well, a commercial hydrocarbon pool has not been discovered.

Hydrocarbon charge and seal were recognised as key risks for the Apus-1 well pre-drill. The early interpretation of the drilling results indicates there is evidence of hydrocarbons migrating to the Apus location; however, they may not have migrated in sufficient quantity for a commercial hydrocarbon pool to form, or sufficient hydrocarbons were not able to be retained within the closure that was drilled. The Apus Island is surrounded by shale-filled channels which isolates it from the Dorado and Pavo discoveries.

Wireline formation evaluation tools are being run to gain information to support further exploration in the Bedout Sub-basin, after which the well will be left in a safe condition.

Carnarvon Managing Director and CEO, Adrian Cook, said: “Collectively, the Pavo-1 and Apus-1 results open up the potential of the Bedout Sub-basin by proving the existence of hydrocarbons and high-quality reservoirs a considerable distance east and southeast from the Dorado and Roc fields.”

Cook pointed out that the exploration endeavours in the Bedout Sub-basin have delivered two large and important assets in terms of the Dorado oil, gas and condensate field, and the more recent Pavo oil field.

He added: “In addition to maturing our future exploration plans, the development and production of the Dorado and Pavo resources will be a core focus for Carnarvon with the Dorado Phase 1 liquids development on track for a final investment decision (FID) this year.”

As a reminder, Santos has recently made what it described as an important step on the path towards a final investment decision on the Dorado project, which is expected in mid-2022.