Carnarvon mobilising to spud Buffalo well in early November

Oil and gas company Carnarvon Petroleum is on track to start drilling operations on its Buffalo-10 well, located in the Timor Sea, in early November, using a Valaris-owned jack-up rig.

The Buffalo project involves the redevelopment of the Buffalo oil field in the Timor Sea. The field resides in only 30 metres of water with a reservoir depth between 3,200 and 3,300 meters below the seabed. The previous field proved the existence of a very high deliverability reservoir containing high-quality light oil that is expected to sell at a premium to Brent in today’s market, according to Carnarvon Petroleum.

Carnarvon, as the operator of the project, said in an update on Wednesday it is preparing to drill the well that will penetrate the existing oil column remaining (because the field was still producing when it was shut-in in 2004), and assess the extent of the revised mapped attic oil column.

Carnarvon’s mid-case recoverable volume estimate is 31 million barrels (gross, 2C contingent resource). With the minimum economic field size estimated to be significantly lower than the mid-case estimate, there is a strong likelihood the Buffalo-10 well will confirm an economic project. Accordingly, Carnarvon’s drilling plans provide for the Buffalo-10 well to be retained as the first production well in the redevelopment program.

Carnarvon is also working with its project partner, Advance Energy, on plans to compress the timeline to the first production once the Buffalo-10 well confirms the expected recoverable oil resource. These plans include engaging with the industry for the supply and installation of suitable equipment to produce the oil.

As previously reported, the Valaris JU-107 drilling rig was contracted to drill the Buffalo-10 well. The rig will move to the Buffalo drilling site once it has completed its current operations which are around 300 kilometres from the Buffalo location. Timing-wise, the rig is expected to start Buffalo drilling operations in early November, namely in around 6 weeks’ time.

Valaris this week also confirmed the contract award for the Buffalo well with an estimated duration of 30 days. The rig’s current contract with Jadestone is set to expire in October 2021, according to the rig owner’s fleet status report.

A site survey of the anticipated surface location has been undertaken, with confirmation that the location is suitable for the jack-up drilling rig.

In addition to the rig, a number of ancillary contracts have now been signed with support vessels, helicopters, drilling service providers and shore base and logistics providers. Equipment is being mobilised in preparation for drilling to start within a few weeks.

Carnarvon emphasised that the final well timing will be subject to the release of the rig from the previous operator, and securing the last remaining services and equipment, and receiving the necessary joint venture and regulatory approvals.

Carnarvon Managing Director and CEO, Adrian Cook, said: “Once drilling commences, we expect to reach the target in around 35 days and, given our modelled economics, this well has the potential to be value-transforming for Carnarvon”.