New Standard Energy Limited (NSE) has announced that deepening of the Lawford #1 well in EP417 in the Canning Basin has commenced. The well is being drilled by Buru Energy Limited (BRU) using the Century Rig #7 under an agreement with NSE, the operator of EP417. BRU will operate the deepening of the Lawford #1 well, after which the operatorship of EP 417 will revert to NSE.
The Lawford #1 well will test the hydrocarbon content in the tight gas sands and shales of the Anderson and Laurel formations in the very large Lawford structural target which has the potential to host significant quantities of hydrocarbons. It will provide important information for the upside potential of other large structures within EP417 and the potential for a large regional unconventional gas play extending beyond the structure.
Green Rock will earn a 15% interest in EP 417 by paying 27.5% of the Lawford#1 total well cost up of $4 million (i.e. Green Rock share $1.1 million) and 15% of costs above $4 million. Commencement of the drilling of Lawford #1 triggers the final payment of back costs by Green Rock to NSE of $200,000.
Current expectations are for the Lawford #1 well to take around 13 days to reach the target depth of approximately 2,780 metres. During the course of drilling operations, drilling progress reports will be provided by the operator to the ASX each Thursday and as required upon the occurrence of any material event. NSE expects to issue the next drilling progress report on 6 October 2011 unless a material event occurs in the interim.
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