Santos Limited Announced the Successful Appraisal of the Corvus Field

Australian energy company, Santos Limited (ASX: STO) has discovered significant gas resource in the Carnarvon Basin, offshore Western Australia, giving a great start to the company’s 2019 offshore drilling campaign.

In an announcement made on 16 April 2019, the company announced the successful appraisal of the Corvus field, with Corvus-2 confirming a significant gas resource in the Carnarvon Basin. However, despite this news, the company’s shares were down by 1.124% in the intraday trade as on 16 April 2019 (11:54 AM).

The positive results from Corvus-2 have opened various additional exploration opportunities in the region. In the announcement, the company informed that the well which is located in petroleum permit WA-45-R has intersected a gross interval of 638 metres which is one of the largest columns ever discovered across the North West Shelf.

The initial samples of Corvus-2 are indicating Condensate Gas Ratio of up to 10 bbl/mmscf which is significantly higher than Corvus-1, however, the samples are indicating CO2 content of 7% which is similar to Corvus-1.

Corvus-2 is around 3 Km southwest of Corvus-1, which was drilled in 2000. The water depth at location is 63 metres and the field is around 28 km from the Reindeer platform, which delivers gas to the Devil Creek domestic gas plant near Karratha, and approximately 62 km to a Varanus Island tie-in point.  The company is currently having a 100 percent interest in all these facilities.

While commenting on the results, the company’s Managing Director and Chief Executive Officer (CEO) Kevin Gallagher told that Corvus-2 has delivered a fantastic result and has opened up a number of additional exploration opportunities in the region.

He further told that it is particularly exciting to have realised a higher liquids content and significantly bigger resource volume than the company expected.

According to him, Corvus could be tied back to either the company’s Devil Creek or Varanus Island gas plants, where it has the potential to increase the utilisation of the company’s existing facilities as well as provide backfill and extend plateau well into the 2030s.

These results have given a great start to the company’s 2019 offshore drilling campaign, and they also highlight the value of the Quadrant acquisition and the company’s strategy of pursuing upstream brownfield growth opportunities around existing infrastructure.

The rig is now going to move north to start the Dorado appraisal program.

As the Operator of EP112 Joint Operations, the company has advised Central Petroleum Limited that Dukas-1 well spudded today at 7.45 AM AEST. Once the well is completed Central will retain a 30 percent interest in EP112 with Santos holding 70 percent. It is expected that the Dukas-1 drilling program will reach to a total depth of ~3,600 metres measured depth.

At the time of writing, i.e., on 16 April 2019 (AEST 11:54 AM), the stock of the company was trading at a price of A$7.035, down 1.194% during the day’s trade with the market capitalisation of ~A$14.83 Bn. In the past six months, the share price of the company increased by 0.42% as on 15 April 2019.


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