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Norwest Energy Increasing Oil And Gas Flows At Arrowsmith-2

Norwest Energy (ASX: NWE) has observed a sharp increase in the oil cut and gas flow rates from clean up of its Arrowsmith-2 well in the Perth basin after swabbing operations started earlier this month.

Arrowsmith-2 is now flowing between 120 barrels and 150 barrels of fluid per day with an oil cut of close to 15% and gas flow of up to 70,000 cubic feet per day from the Kockatea Shale, the shallowest and first of the intervals to be flowed back.

Norwest noted that about 8000 barrels of fluid was injected into the Kockatea during hydraulic fracture stimulation carried out in September 2012 and that about 80% of this needs to be returned to surface before indicative flow rates for gas and oil can be established.

About 66% of the total fluid is estimated to have been recovered with daily water testing indicating the water being produced is injected fracture stimulation fluid, with no signs of any formation water being produced.

The company had started clean-up and flowback activities at Arrowsmith-2 on 29 October 2012 and has started swabbing operations on 19 November.

Approval was also received from the Department of Mines and Petroleum to operate a 24 hour shift, further improving the rate of flow back.

Way forward

Once the testing program is completed, the Kockatea Shale interval will be sealed off and flow back will then recommence on the lower intervals, the Carynginia Formation and the Irwin River Coal Measures, with the ultimate objective being to establish gas rates for contingent resource calculations from each of the individual formations.

While a gas rate was not confirmed initially due to limited flow back time, the Lower and Middle Carynginia and the Irwin River Coal Measures all remain highly prospective as potential shale gas producers.

The Irwin River Coal Measures was slower to deliver gas compared to the other zones though this is believed to be a product of the flow back strategy used on this zone rather than an indication of its ability to produce gas.

The High Cliff Sandstone, a tight sandstone target, is expected to deliver a significantly higher rate than the reported rate of 777,000 cubic feet of gas per day once the zone is fully cleaned up.

An extended well test will then be required to determine the areal extent of the HCSS target. It is expected that this program of work will run for 3-4 months, depending upon results.

Partners in EP 413 are operator Norwest with 27.945%, AWE Limited (ASX: AWE) with 44.252% and Bharat Petroleum (27.803%).

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