Key Petroleum (ASX: KEY) continues to build up the case for unconventional oil at its Cyrene-1 exploration well in the onshore Canning Basin with further oil and gas shows observed during coring of the lower Goldwyer Formation.
"The oil and gas shows to date are extremely significant to both the conventional and unconventional potential of this part of the Canning Basin," managing director Kane Marshall said.
"The oil shows and chromatograph readings mean that the Goldwyer Formation is in the oil generating window and is supported by the relatively low methane levels (C1) and high pentane levels (C5).
"This is what you would expect in oil generating source rocks and certainly supports the Joint Venture's view that we have encountered an active petroleum system in this part of the Canning."
He said the shows upgraded the prospectivity of EP 438 and provided a lot of encouragement for follow up drilling as it appeared to be the first time that any joint venture had cored the Goldwyer shale extensively where there are clear hydrocarbon - in particular oil - indications.
"The increase in background gas over some of the Goldwyer Formation is supportive of good total organic content (TOC) required for establishing a commercial shale gas resource," Marshall added.
"There is obviously potential for both unconventional oil and gas in this part of the basin and we are still yet to drill through to the conventional oil targets in Cyrene-1.
"For Key, the conventional opportunities are located in close proximity to the Great Northern Highway meaning we can quickly commercialise any discoveries given we are ideally placed to leverage off infrastructure opportunities and other developments in the area such as Ungani.
"This is a very exciting time for our shareholders and we certainly hope there will be a lot more positive information to come as we drill ahead into in the Willara after we complete this comprehensive coring and logging program of the Goldwyer Formation."
The DCA Rig 7 is preparing to core the well to 1,023 metres following which a comprehensive logging program will be conducted over the Goldwyer prior to drilling ahead towards the conventional Willara Formation objective.
Cyrene-1 had intersected oil shows over a 43 metre interval prior to coring in the lower Grant and Goldwyer Formations from a depth of 915 metres, though this is likely to increase with the further oil shows encountered since.
The well is being drilled through a 135 metre section within Goldwyer Formation Shales to assess its potential for unconventional hydrocarbons before drilling through the conventional Willara Formation that is estimated to host 5 million barrels of oil.
The well has a planned total depth of 1,060 metres.
Key holds a 20% stake in EP 438 and is operating Cyrene-1 on behalf of the joint venture.
Operator Buru Energy (ASX: BRU) and partner Mitsubishi Corporation are farming into EP 438 by contributing A$3 million to seismic and exploration drilling within the permit to increase their stake to 75% from 5%.
The remaining 5% is held by Indigo Oil.
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