Australia: Comet Ridge Updates on Mahalo Block Pilot Schemes

Comet Ridge Limited provided an operational update for the Mahalo and Mira Pilot Schemes in the Mahalo Block, which is located approximately 240 km west of Gladstone in central Queensland. The Mahalo and Mira Pilot Schemes are part of a Joint Venture plan to book gas reserves across a large part of the Mahalo block.

The objective of the Mahalo and Mira pilot schemes is to lift water from the coal seams, which reduces the pressure in the area around the wells and allows gas to flow to the wells. Ultimately the aim for either of the pilots is that one or more of the wells will produce gas at commercial rates which will allow gas resources to be converted to gas reserves.

A scheduled well shut-in for pressure build-up surveys has been recently conducted and is just concluding at both the Mahalo and Mira fields.

Preliminary analysis of this data from the Mahalo Pilot Scheme confirms that productivities seen in the pumping wells are lower than that measured when the wells were drilled in 2012 and hence remedial work involving a work-over rig will be required to restore the productivity of these wells. Notwithstanding this, dewatering at the Mahalo Field pilot has continued with two wells flowing gas to surface, which is encouraging despite the requirement for remediation. The Joint Venture is finalising plans for a work-over and assessing rig availability to undertake the stimulation work. It is likely this work may initially be undertaken on one or two wells to confirm an improvement in well productivity. In other areas of Queensland, Bowen Basin coals can be sensitive to drilling fluids and in these areas, stimulation such as cavitation, is routinely applied to restore well productivity.

Build-up data from the Mira field has confirmed the generally high productivities seen during testing when the wells were initially drilled in December 2012 to January 2013. The Mira 2, 4 and 5 wells will now be brought back on line to continue dewatering of the coal in the Mira Pilot area. One well, Mira 3, remains off-line due to a downhole pump failure experienced during start-up of pumping operations, which took a number of weeks to diagnose. This well will require a work-over to restore the bottomhole assembly before pumping operations can resume on Mira 3.

This work is currently being planned for execution in the near term, initially at the Mira 3 well so pumping at Mira 3 can resume as soon as possible, followed by the Mahalo stimulation. Santos will operate the work-over programme at Mahalo and Mira.

Equity participants in ATP 337P Mahalo are Comet Ridge Mahalo Pty Ltd 35%, Stanwell Corporation Limited 5%, Australia Pacific LNG Pty Ltd 30% and Santos QNT Pty Ltd 30%.