Central Petroleum has advised that the Palm Valley 12 well, located in the Northern Territory, has reached a measured depth of 2150 m in the lower P2 unit of the Pacoota Formation.

Drilling of the side-track has progressed a total of 130 m this week with hole angle continuing to build towards horizontal.

The objective of the side-track is to test the vertically fractured lower P2 sandstone, encountered in the original well, from a horizontal well bore before entering the P3 sandstone at a near horizontal angle.

Gas was initially discovered at the Palm Valley 1 well in 1965. The gas primarily dwelled in an extensive fracture system in the Lower Stairway Sandstone, Horn Valley Siltstone and Pacoota Sandstones. The system varied in depth between 1800 to 2200 m.
Gas production at Palm Valley predominantly comes from natural fractures which have potential to provide solid production rates.

The PV12 well is being drilled under a joint venture (JV) between Central, New Zealand Oil and Gas (NZOG) and Cue Energy Resources and is scheduled to be completed this year. Central holds a 50 per cent interest in the joint venture, with NZOG holding another 35 per cent interest and Cue Energy holding the remaining 15 per cent.

Cue Energy is an oil and gas production and exploration company with a diversified mix of gas and oil production assets as well as exploration assets in Australia, Indonesia and New Zealand.

The PV12 well is the first of a two-well program which also includes the Dingo-5 exploration and production well.

Source: Oil & Gas Today