By Sarah Byrne

DESPITE the difficult oil and gas market, Carnarvon Petroleum is on the lookout for more acreage to make the most of ongoing low commodity prices.

Speaking with Oil & Gas Australia, Carnarvon Petroleum managing director Adrian Cook said it has room for a little more acreage.

“We have to be careful with balancing the commitments we have made to the government and to deliver on those.”

“But I think we have got room for one or two more, and then I think we will have a pretty full and balanced portfolio,” he said.

Mr Cook expects the window for acquiring acreage to stay open until the end of this year.

“I have a new that we will see some softening in the oil price before we see an improvement in 2017.”

Shallow water acreage located in the North West Shelf, with either proven hydrocarbons in the block or close by, is what Carnarvon is looking to acquire, Mr Cook said.

Carnarvon acquired 100 per cent of WA 523 P, located on the North West Shelf, at the end of May.

Mr Cook said the company would apply seismic imaging technologies to uncover new and proven oil plays in the permit, a technique which was successful in the company’s Phoenix permits.

Carnarvon has initiated the reprocessing work which will take around 12 months to complete.

If successful, the company has the opportunity to commit to acquire new 3D seismic data and drill a well over the course of the following three years.

The recently acquired acreage includes proven undeveloped oil pools at the Bluff 1 and Buller 1 exploration wells.

Carnarvon said either discovery may prove to be commercially significant if the new imaging reveals volumetric upside.

Improved data will enable detailed remapping and facilitate work towards a drilling program, Carnarvon said.

In early June Carnarvon received fast track analysis of a number of sidewall cores across the Caley reservoir section of the Roc 1 well.

Mr Cook said these results were particularly exciting for the company because they show the reservoir rock is not as tight as expected.

“The permeability first is definitely good.

But more importantly the permeability is certainly well beyond what you need to produce gas, in our interpretation,” he said.

Results show Roc 1 well permeabilities are substantially better than the 10 millidarcy (mD) to 100mD reported early this year.

Sections of the reservoir recorded 500mD with Carnarvon interpreting a weighted average over sands one to four of around 130mD.

In addition, the company reported a high condensate to gas ratio (CGR) or around 60 barrels per million cubic feet of gas.

Carnarvon said higher CGRs generally increased the value of the project due to the value of the liquids that can be produced and sold with the gas production.

Operator Quadrant Energy said the Ocean Monarch rig was expected to be on location at Roc 2 to start drilling in the first or second week of July.

Roc 2 will be drilled to a depth of 5,250 metres with capacity to extend to 5,700 metres if justified by hydrocarbon shows, reservoir quality and drilling conditions, Carnarvon said.

“What we don’t want to do is to wait for a few years until oil prices are stronger and the market is more confident and the price for blocks, seismic and drilling is all high again, to then go through the cycle of discovering it and bring it on, potentially to be at risk of producing it in a down cycle.”

Mr Cook said Carnarvon is trying to work with the cycle by picking up blocks at low cost, seismic at low cost and hopefully future drilling at a low cost.

“If we are luck then when we come to bring the resource to production and sell, it will be at the right time in the pricing market.”

“If we can get this Roc resource up and producing then I think we really have the tiger by the tail out here,” Mr Cook added.

Quadrant commenced drilling of the Outtrim East 1 well on 18 June, according to a Carnarvon announcement.

Outtrim East 1 is located within the WA 155 P(1) exploration permit in the North West Shelf.