Australian Oil Company (ASX:AOK) progresses production activities
Australian Oil Company has provided an operational update covering its Queensland and Californian oil and gas portfolio, including production from Emu Apple 1, development planning at Riverslea, gas commercialisation work at Major 4 and prospective resource work across PL 30.
Highlights
Emu Apple 1 is producing between 10 and 20 barrels of oil per day.
No water cut has been observed from the well to date.
Final Riverslea crude assays are underway.
Californian wells are flowing at approximately 350 Mcf per day combined.
International exploration concessions are under discussion in 2 jurisdictions.
Following a recent intervention, Emu Apple 1 has been producing between 10 and 20 barrels of oil per day while operating at the same pump rate during the post intervention clean up.
Fluid levels remain significantly higher than the pump intake, which the company said confirms good communication between the well and reservoir and provides scope to increase production over the coming weeks.
The company said the dry oil production profile supports more efficient handling of produced fluids, reduces pressure on evaporation pond capacity and provides greater scope to increase output after the well has been adequately cleaned up and operating parameters are further optimised.
Pump rates, produced fluids and tank levels continue to be monitored.
Based on current production and storage, the next lifting of Emu Apple crude is anticipated within the next fortnight.
Brent oil has recently approached US$100 per barrel. In response to higher oil prices, Australian Oil Company is assessing the recommencement of production from Emu Apple 2 and Emu Apple 3.
Australian Oil Managing Director Kane Marshall said,
“With oil prices strengthening, we are focused on disciplined, low-cost production growth across Emu Apple and Riverslea, while also advancing gas commercialisation opportunities at Major and in California.”
Additional lightweight, mobile hydraulic pumping units that can be installed without concrete foundations have been inspected and identified for potential deployment across Emu Apple and Riverslea.
Spare load out and pump infrastructure at Emu Apple will be moved to Riverslea after clean up operations conclude and the next crude lifting occurs.
Within PL 30, which contains the Riverslea and Yapunyah fields, development activity is being accelerated in response to higher oil prices and the opportunity to use existing infrastructure.
Australian Oil Company is assessing the restart of Riverslea 1 and Riverslea 3 as part of its stated objective to increase oil production from its Surat Basin portfolio.
Final assays for Riverslea crude are underway and are expected to be incorporated into offtake arrangements while also supporting planning for the proposed restart program.
Prospective resource work across the wider PL 30 area has been prioritised due to higher oil prices and the proximity of preliminary mapped prospects to Riverslea infrastructure.
Available geological, geophysical and production data are being integrated to progress mapped prospects and leads to a more mature technical status.
At the Major Gas Field within PL 512, a raw gas sale agreement is being advanced to allow gas produced from Major 4 to be treated.
Final matters concerning metering, shutdown valves and communications are being negotiated for offtake.
Work involving the refurbishment of de foamers at the wellhead and the installation of shutdown valves is also in progress.
Major 4 has a wellhead pressure of 1,000 psi, consistent with Boxley producing wells in the area.
In California, Reclamation Board 7 and Reclamation Board 8 have returned to production following further maintenance and are flowing at approximately 350 Mcf per day combined.
Routing through the PEOCO owned compressor is expected to increase their combined rate towards approximately 500 Mcf per day.
Californian gas prices were consistently above US$3.70 at Citygate during the final week of August.
Current activities include monitoring Emu Apple 1, completing the Riverslea crude assays and progressing the Major 4 gas arrangements.
The company is also negotiating with regulators in 2 separate jurisdictions concerning international exploration concessions, consistent with its strategy of assessing opportunities beyond its existing core regions.