Aussies lift stakes in Texas gas prospect

FOLLOWING good early results at the Flour Bluff gas development project in Corpus Christi, Texas, the Australian Flour Bluff partners – Sun Resources, Victoria Petroleum and Aurora Oil & Gas – have lifted their stakes in the eastern part of the prospect.
Aussies lift stakes in Texas gas prospect Aussies lift stakes in Texas gas prospect Aussies lift stakes in Texas gas prospect Aussies lift stakes in Texas gas prospect Aussies lift stakes in Texas gas prospect

The Flour Bluff Gas Field is an old South Texas giant gas field, which has produced about one trillion cubic feet of gas with associated condensate since discovered in 1934. Production has been mainly from shallow reservoirs between 1,980 metres and 2,600 metres which are now largely depleted.

The area is divided by faulting into the Flour Bluff field to the west of the fault and the East Flour Bluff field to the east. Current estimates of reserves attribute roughly 104 BCF to Flour Bluff (with additional upside potential up-dip of the current Webb 1 well) and 24 BCF to East Flour Bluff (with additional upside).

The three Australian partners have now acquired an additional 4.1666% working interest (2.9166% net revenue interest) in the East Flour Bluff Gas Field for US$ 513,333 each. This increases each partner’s total working interest to 16.666% and net revenue interest to 11.666%. These interests were all acquired from the operator – US private company Texas Crude Energy – which wanted to reduce its holding in East Flour Bluff Gas Field to 25%. The remaining interests are held by other US private companies.

“The acquisition has increased the company’s reserve base at an attractive price and increases cash flows from the East Flour Bluff Gas Field as development proceeds and the existing production increases,” said Sun Resources managing director Brad Farrell.

On the basis of the 3P reserves only, the Australian partners have acquired these reserves for US$0.52 per MCF, according to Farrell. If the additional reserve potential is included with the 3P reserves, they have acquired the combined reserves for US$ 0.18 per MCF. Recent gas sales have been around US$6.70 per MCF.

The Flour Bluff Development Project aims to develop two sets of known but virtually undeveloped deeper reservoirs between 2,750 metres and 3,600 metres. The Flour bluff field remains the only South Texas giant field which has not been deepened and redeveloped in this way.

The initial development program consists of three key wells, each designed to test the extent of gas reserves in critical locations in the Flour Bluff field and the East Flour Bluff field. If successful each of the wells would be completed as production wells.

The first well BG Webb-1, was drilled to 4115 metres in the Flour Bluff field and was cased and suspended on the 7 April to await a work-over rig to conduct flow testing and reservoir stimulation operations and to complete the well for production if warranted. These testing operations are now in progress.

Drilling and wire line results from this well for the overlying Frio J and Frio K 15 sands of the West Flour Bluff Gas Field indicate a 3P recoverable gas reserve of 104 billion cubic feet of gas as advised by the operator. But the deeper K Sands have proven to be water wet in this part of the field.

The EFB D-24 well, the second well in the program, is located in the East Flour Bluff gas field and is designed to test four main “J” sands reservoirs and potential reservoirs as the primary target and three potential reservoirs in the deeper “K” sands as a secondary target.

EFB D-24 is currently drilling of the 8 ½ inch hole and proceeding towards the top of the primary target zone in the J sands at about 3,210 metres, Aurora managing director Jon Stewart told

“We had a very good gas kick in the target J sands, which is encouraging for production from this well,” Stewart said.

The joint venture has approved the construction of a pipeline to connect the BG Webb-1 well to the Joint Venture’s gas gathering system for the Flour Bluff Field, Stewart said.

Tomorrow - Menswear firm, Tony Barlow, uses Flour Bluff to remake itself as petroleum company, Aurora Oil & Gas

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