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Grant of retention lease WA-54-R Greater Cornea fields

MELBOURNE, Australia -- The Commonwealth West Australia Offshore Petroleum Joint Authority has now granted Petroleum Retention Lease WA-54-R (Cornea Retention Lease) with respect to the Cornea oil and gas accumulation to the Cornea Joint Venture Participants, an important step on our pathway to the ultimate development of the oil potential of this resource.

The Cornea Retention Lease provides the Participants with an initial 5 year period in which to progress the assessment and feasibility of a major staged development of the Cornea Oil Field (“Cornea”). The terms have been designed, on a step by step basis, to accommodate development challenges and to provide a progressive de-risking of those challenges.

Cornea is a significant prize to strive for, as it represents one of the largest undeveloped oil resources in Australia, with a P50 estimate of 411 MMbbl in place. But it faces a presently low assessed recovery factor, which is a function of the technical challenges that the successful development faces. The terms of the Retention Lease reflect the need to progressively and methodically deal with each of those challenges.
Cornea present s a unique set of circumstances. While significant hydrocarbons have been discovered, with oil and gas samples obtained and resources identified, productivity of the reservoirs has not been proven, despite a large number of exploration and appraisal wells being drilled into the accumulation. The quantum of contingent resources in Cornea is such that it can reasonably be expected to be economic, so long as production flow rates can be achieved.

There are two significant barriers that must be overcome for Cornea to become commercially viable:

Technical challenges presented by reservoir characteristics require the deployment of new technology completions in order to unlock oil production; and
Assessment of the productivity of the wells and the recovery factors that can be achieved.

Cornea to achieve higher recoveries than those that could be expected to be achieved today. Technologies for enabling remote controllable interventions and preventing gas cusping into horizontal wells are in research and under development, including both the valves themselves and the surveillance/telemetry to detect and potentially seal off well segments where breakthrough has occurred. Innovations and improvements in drilling techniques and in production and development processes are expected progressively over the next 5 years and will be incorporated in the production well test to be implemented by the Cornea JV.

06/13/2014

 

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