Stuart targeting Cooper CSG

In a letter to shareholders, chairman John Branson said seven locations to drill for oil had been selected in an effort to boost the company’s reserves.

“During 2010 and 2011, Stuart will seek to replace its annual oil production – in the region of 300,000 barrels – and build its reserves base with a targeted program of seven high-probability oil exploration wells,” he explained.

According to Branson, the seven wells will target structures capable of producing mean un-risked recoverable oil of 2.5 million barrels.

The drilling program will also target gas in sandstone reservoirs with three well locations chosen.

Branson said the Toolachee Formation Coal Measures, particularly those in the northern section of the Cooper, were thick, extensive and gassy.

“They are host to extremely large quantities of gas and they may present Stuart with an opportunity to become a major developer and producer of coal seam gas from the Cooper Basin.”

He added that the company has established a working group to incorporate its own geological and engineering knowledge with CSG expertise from US experts.

The group is expected to start work next quarter with a detailed study of the stratigraphy of the Toolachee Formation Coal Measures.

Subject to the completion of the studies, the first well to be hydraulically fractured to produce CSG is expected late in 2010 or early 2011.

In other company news, Stuart reported oil sales revenue for the quarter of $7.7 million, up 4% on the previous quarter and 17% on the same period last year.

However, production dropped 12% to 57,081bbl on the preceding quarter while the average price of oil per barrel rose 18% to $A134.5/bbl.

Monday, 1 February 2010
PNN