On 25 September 2017, the Operator announced Xanadu field 1 as an Oil Discovery.

The Xanadu-1 well was spud on 4th September 2017, and reached a total depth of 2035mMDRT on Sunday 17th September, when it was confirmed that the Xanadu-1 well had intersected hydrocarbon bearing intervals as demonstrated by elevated gas readings, oil shows, fluorescence and cut-fluorescence whilst drilling.

A suite of logs over a 330m section of the well have been acquired by service provider Schlumberger.  The logging suite included:

  • Magnetic resonance logging in combination with MDT pressure and fluid sampling;
  • Porosity logs;
  • Full hole diameter 3D radial pressure and fluid sampling via the Schlumberger Saturn Probe tool.

This logging has delineated net and gross reservoir sections within the well, provided greater understanding of the reservoir characteristics and yielded quality oil samples.

Forward Plan

The Cliff Head Oil Field discovery well Cliff Head-1 identified a gross 4.8m oil column at the top of the IRCM below the Kockatea Shale – the same stratigraphy encountered at Xanadu-1.  Cliff Head-1 was immediately side-tracked to a more favourable up-dip location where a 36m gross oil column was intersected.

Xanadu-1 was not initially designed to be completed as a producing well and now, with a better understanding of the stratigraphy, a side-track well similar to Cliff Head-1 is considered an excellent option, with the top section down to 971mMDRT already cased and cemented in place (approximately 250m vertically above the zone of interest).

The rig is currently in the process of suspending the well.  Based on results, and armed with much greater knowledge, the Joint Venture is planning to drill an up-dip side-track appraisal well from the casing shoe, with the potential to be completed as a commercially producing well.  The opportunity to also drill a horizontal production well from this location will be studied, with results depending on a final determination of reservoir and oil properties feeding into a production model and cash-flow forecast.

Based on the current understanding of the structure, there is an excellent chance of finding a significantly thicker column in an up-dip location which can be reached from the current drilling pad.

The Operator is in the process of lodging a Discovery Notice with the Minister for Mines, Industry Regulation and Safety.  This is a requirement under the Guidelines to Petroleum and Geothermal Energy Resources and Petroleum (Submerged Lands) Regulations 2015.

JV Background

In May 2017, Whitebark formalised a Joint Venture partnership to drill the 160 MMbbls Xanadu prospect.  Whitebark has committed to funding 20% of the cost of the conventional Xanadu-1 well to earn a 15% interest in the Xanadu prospect and TP15 alongside permit operator Norwest Energy (ASX: NWE), Triangle Energy and 3C Group. Xanadu-1 is an offshore project that will be drilled from an adjoining onshore permit operator by Norwest.

The TP15 Joint Venture interests and contributions to the well costs were made up as follows:

 

 

In addition to the farm-in, Whitebark acquired 100,000,000 shares in Norwest Energy for $200,000 giving Whitebark an additional indirect interest of presently ~3.7% in Xanadu / TP15.

 

 

Prospect Background

TP15 is located near Dongara in the offshore northern Perth Basin, Western Australia.  The Joint Venture is planning to drill a well on the Xanadu prospect, located at the southern end of TP15 (see map below), which is estimated to hold an un-risked recoverable resource of 160 MMbbls1 (Refer Table 2 below) late in 2017.

Xanadu-1 will target Permian sands from a depth of about 800m. Near-shore sands of the Dongara Sandstone represent the primary target, with secondary targets in the fluvio-deltaic Irwin River Coal Measures and the regressive marine sands of the High Cliff Sandstone.

Mapping of 2D marine seismic data has provided a comprehensive regional interpretation of the structural setting and charge history for the Xanadu oil prospect.

The structural mapping, which is based on good quality 2D seismic data and high-resolution gravity data from a 2009 airborne 3D Full Tensor Graviometry Survey, indicates that the Xanadu prospect is geologically similar to both the Cliff Head and Hovea structures.

In estimating the recoverable oil volumes summarised in Table 2 below, a 50 per cent recovery factor has been assumed.

 

Norwest’s assessment of the chance of discovery and chance of development associated with the Xanadu prospect are provided in the following table: As per last quarterly.

Competent Person

The information on the Xanadu prospect is based on information compiled by Mr. Dean Powell of Powell Seismic Services. Mr. Powell holds a Bachelor Degree of Applied Science (Physics) and is a member of the Society of Exploration Geophysicists. He has over 40 years of experience in petroleum exploration. Mr. Powell has consented in writing to the inclusion of the information stated in the form and context in which it appears.