KAROON ENERGY DRILLS TO FINAL DEPTH IN NEW WELL OFFSHORE BRAZIL

(WO) – Karoon reports that the Neon-2 control well reached a final total depth of 2,357 m Measured Depth (MD) on March 7. The well was spudded to the northeast of the Echidna-1 discovery well, with the lower section deviated to the west to intersect the target zones some 1.3 km north of Echidna-1.

The primary objectives of Neon-2 were to determine the quality and continuity of the Paleocene units and to determine Paleocene pressure connectivity with the Echidna-1 and Neon-1 wells. Preliminary analysis of the logging-while-drilling and wireline log data available at Neon-2 has confirmed that, as at Neon-1, the Paleocene sandstone primary target zones are present and oil bearing at this location.

The Paleocene intervals were found to be present over a gross 244 m MD interval (172 m true vertical thickness). The net pay thickness in this section is estimated to be 148 m MD (105 m true vertical thickness).

Importantly, preliminary wireline log analysis indicates that the average reservoir quality in this net pay section is similar to, or better than, that encountered at Echidna-1 and Neon-1.

Preliminary analysis of pressure tests through the Paleocene section suggests that the Neon-2 oil zones lie on similar pressure gradients to the oil at Echidna-1 and Neon-1. Further work is required to determine the degree of communication between zones, given that Neon-2 intersected the reservoir on the western side of a prominent fault.

Neon-2 also tested deeper Maastrichtian targets which, in line with results from Echidna-1 and Neon-1, were found to be poorly developed with no net pay currently identified. 

The forward plan is to complete the wireline logging program, then plug and abandon Neon-2. Karoon will then release the Noble Developer rig.

Over the next few months, data from both Neon-1 and Neon-2 will be fully analyzed, leading to an updated resource estimate for the Neon field. The current resources estimated for the Neon field (assessed in May 2018) are 30 MMbbl, 55 MMbbl and 92 MMbbl for 1C, 2C and 3C Contingent Resources, respectively.

Together with development engineering studies, the updated resource estimate will contribute to an evaluation of technical and commercial feasibility, which could potentially enable a decision to enter a Neon concept select phase. 

Neon-1 and Neon-2 are located within Karoon’s 100% owned S-M-1037 license, approximately 210 km offshore Brazil in the southern Santos basin. Neon-1 is in 343 m water depth and is 2.1 km south of the Echidna-1 discovery well, while Neon-2 is located 1.3 km NNE of Echidna-1, in 305 m water depth.  

Chief Executive Officer and Managing Director, Dr Julian Fowles, commented, “The well has confirmed the presence of oil bearing sands, of potentially better than expected quality, in the northern part of the Neon field. In addition, as anticipated pre-drill, the Paleocene reservoir section thickens across a fault towards the salt dome. Wireline logging will be completed shortly, which we expect will provide us with the data required to update our subsurface evaluation and our estimate of the resource potential of the Neon field.  We are aiming to complete this resource review by mid-year, ahead of the 2023 Annual Report in August 2023. 

“Given the encouraging results from the control well campaign, further development engineering studies will take place concurrently, which, together with the revised resource estimates, will allow us to assess the viability of the current development concepts and whether to progress into the next phase, Concept Select. We shall be in a position to provide more information on the timing of a potential Concept Select decision once the resource evaluation is complete.”