White Sands is following an old-fashioned US independent’s style by entering farm-in arrangements as a joint venturer and fulfilling part of its farm-in obligation by bringing a rig to the program.
The Queensland-based private explorer is 25% owned by Perth-based Bounty Oil, and plans to issue a prospectus in the next few weeks to raise $8 million to fund its increasing onshore exploration program across Australia.
The company raised seed capital of $500,000 in September backed by stockbroker ABN Amro Morgan and is hoping to fill its share offer and list on the ASX by December.
Managing director Don Schofield said he had been working on the business plan for White Sands for several years and it was fortuitous that the company was entering the Australian scene at a time of intense exploration activity when drilling rigs were at a premium.
Schofield, a geologist and petroleum engineer from Colorado, came to Australia briefly for Getty Oil 20 years ago, returned to the US for two years and then came back to work in research broking before going out on his own.
He says the White Sands name is taken from the ideal reservoir target – clean, thick high-porosity sands.
The company has brought in its first rig – a state-of-the-art fully automated unit built in Norway by Engineering & Drilling Machinery (EDM) of Stavanger, which specialises in platform-based workover units for the North Sea.
The computer-controlled rig has automated pipe handling and remote control. It has top drive power, making it very powerful and suitable for under-balanced and directional drilling.
But it has none of a conventional rig’s draw works, rotary table or traveling block. The unit is now being airconditioned and dustproofed for work in the hot desert conditions of inland Australia as its computer controls cannot work in more than 40°C.
The unit has slim-hole depth capacity to 4000m and no difficulty in drilling conventional hole to 3500m. It is manned by half the number of crew of a conventional rig and can be transported in 12 truck-loads.
The company’s ongoing work program includes: a deep well for Victoria Petroleum at Reids Dome in Surat permit ATP333P; five wells in Cooper Basin PEL182 for Eagle Bay Resources to earn 10% equity; four wells in Central Petroleum’s Pedirka Basin permits EP93, EP92 and application PLA77 by bringing the rig and paying 22.5% of costs to earn 15%; and drilling in the Bounty Oil & Gas Utopia oil field in ATP560, a Queensland Eromanga Basin permit.
White Sands is looking for a premises south-east of Brisbane where it can have yard room for rig components. It will decide whether to purchase additional automated rigs at a later date.
