LINC Energy has announced its intentions to drill three wells in South Australia’s Arckaringa basin in 2014 as part of the next phase of exploration and development of the asset, with hopes the campaign will underpin a “company making project.”
Linc will start the process of unlocking the potential 103 billion barrels of oil equivalent in recoverable oil and gas reserves in the basin in late July.
The company plans to self-fund the targeted exploration program before it considers partnering for phase two or three of development. While the program will be funded within its budget, Linc didn’t state the capital expenditure requirement for the drilling campaign.
Linc said it had engaged Baker Hughes as shale experts and advisors on the program with the outcomes of the study used to assist Linc with the design of the three well exploration program to test the deeper more prospective parts of the basin.
This drilling program is likely to be focused on the Boorthanna Trough. To date, no previous drilling has intersected the formations at depth and the results of these wells will be critical to understanding the basin in detail.
Subject to drilling results and board approval, Linc plans to follow up this initial three well program with a further three wells to start late this year. It is envisaged that based on the success of these six wells Linc will enter an aggressive and focused drilling campaign to start to unlock the potential of the basin.
Linc Energy’s research to date suggests that the conventional oil opportunities are also significant with several very good conventional oil well opportunities identified for exploration in the near future.
Linc Energy managing director and chief executive Peter Bond said the targeted exploration program will help it understand the deeper, more prospective parts of the basin.
“Importantly for shareholders, we have not had to reduce our exposure to the upside of this asset and yet are still able to explore and potentially develop this simply massive oil opportunity,” he said.
“With Brent crude oil at over $110 per barrel and further uncertainty in the global oil markets and with the reports and modelling completed by Baker Hughes showing a great oil and gas opportunity awaits us, now is obviously the ideal time to act and commence this drilling program.
Mr Bond said the company had a lot of experience in completing successful drilling programs from the Texas Gulf Coast to Alaska.
“I am confident that our drilling program in the Arckaringa basin will be a company making project,” he said.
Linc Energy holds more than 65,000 square kilometres within the Arckaringa basin across seven petroleum exploration licences and one PEL application.