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Summary

Successful production test of Casino-3 gas well

Santos Limited, on behalf of the VIC/P44 Joint Venture, announces that it has conducted a successful production test of the Casino-3 well in the offshore Otway Basin.

The production test measured gas flow over the primary reservoir zone encountered in the Casino 3 well to confirm reservoir flow characteristics.

The successful test means that Santos and its joint venturers can now finalise reservoir modelling and commence detailed project engineering with a view to first production in 2006.

The test flowed at the maximum choke-constrained rate of 1.25 million cubic metres per day (45 million standard cubic feet per day) through a 25.4 millimetre (one inch) choke at a well head tubing pressure of 12,686 kilopascals (1,840 pounds per square inch). The test was conducted over the interval 2,004 to 2,013 metres.

This is a promising result consistent with the core and log data collected in the well and our predrill expectations. This is a key milestone in the future development of the Casino gas field, said Santos Managing Director, Mr John Ellice-Flint.

The successful production test follows on from the earlier announcement that Casino-3 had intersected a 20-metre net gas column in the target Waarre sandstone and that a single gas pool connects Casino-3 with the previously drilled Casino-2 well.

The well will be plugged and abandoned as planned following the completion of testing operations.

Santos and its joint venture partners have already successfully concluded a long-term gas contract with TXU Australia to supply gas from the Casino field. The contract is conditional on the final results of the Casino-3 well and the confirmation of economic reserves for the Casino field and regulatory approvals.

The Casino gas field – first discovered in September 2002 – is located about 29 kilometres south-west of Port Campbell and 250 kilometres south-west of Melbourne. The Casino-3 well is located approximately 3.3 kilometres northeast of Casino-1 and 2.4 kilometres northwest of Casino-2, which both intersected gas bearing Waarre sandstone reservoirs.

Santos Limited is a major Australian oil and gas exploration and production company with interests in all Australian hydrocarbon provinces. The Santos Group also operates in the USA, Indonesia and PNG.

Participants in the VIC/P44 permit are:

Santos Limited (Operator) 50.0%
Peedamullah Petroleum Pty Ltd (Australian Worldwide Exploration) 25.0%
Mittwell Energy Resources Pty Limited (Mitsui) 25.0%