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Key Petroleum Poised To Restart Cyrene-1 Drilling

Key Petroleum (ASX: KEY) expects equipment required to resume drilling of its Cyrene-1 well in the Canning Basin to arrive on site this week and has successfully varied its work commitment for a nearby permit.

The company noted that the arrival of the equipment to start blow out preventer (BOP) testing and spud the main 8 1/2 inch hole section of Cyrene-1 may be subject to delays due to Tropical Cyclone Narelle.

Rig and service personnel are also expected to arrive on site this week.

The forward plan will be to conduct BOP testing prior to drilling out the surface casing.

This will be followed by drilling through to the primary targets including coring of a 135 metre section within Goldwyer Formation Shales to assess its potential as for unconventional hydrocarbons as well as the conventional Willara Formation that is estimated to host 5 million barrels of oil.

Cyrene-1 will be drilled to a total depth of 1060 metres.

Key has a 20% working interest in EP 438, where the well is located, and is acting as operator for the well, which is located close to the Ungani oil field where Buru is carrying out an ongoing extended production test that continues to return encouraging results.

In EP 438, Key has successfully applied for a work commitment variation that will result in a substantial cost saving against the original 500 kilometre 2D seismic survey commitment.

The 2013 work program will be used to further delineate both existing and new prospects as well as assist in understanding the prospectivity of the Goldwyer Shale extending across the Ambrose prospect.

A total of 11 prospects have been mapped in EP 448. These include ten conventional prospects being mapped at the Nita Formation objective in addition to the pre-existing large Ambrose unconventional prospect in the south-eastern part of EP 448.

The work program for this year will include on-ground work to identify well location and access areas as well as undertaking relevant heritage and environmental surveys required for the approval of drilling exploration wells in 2014.

In the Perth Basin, Key and its partners are close to finalising the Waugh-1 drilling program and surface well location.

Waugh-1 targets between 3 million and 5 million barrels of recoverable oil in the Bookara Sandstone and will also evaluate the unconventional potential of the carbonaceous shale section in the Cattamarra Coal Measures.

Depending on the timing of approvals, Waugh-1 could be drilled with DCA Rig 7 in the first half of 2013 immediately after Cyrene-1 as there is an available slot with this rig.

Re-mapping of the Waugh prospect has identified an up-dip well location, Waugh-2. This will be drilled upon an oil discovery at Waugh-1. The re-mapping has also identified a large fault dependent structure to the north of the permit and the venture is currently looking at a number of other prospects to follow up after drilling Waugh-1.

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