SOURCE: Target Energy Limited

Target Energy Limited

November 01, 2013 18:33 ET

Target Energy Limited Issues September 2013 Quarterly Report

WEST PERTH, AUSTRALIA--(Marketwired - Nov 1, 2013) - US-focussed oil and gas producer Target Energy Limited ("Target") (OTCQX: TEXQY) (ASX: TEX) is pleased to issue its Quarterly Report for the quarter ending 30 September 2013.

  • Fairway production averages over 320 BOEPD in September

  • Darwin #3 frac stimulation now underway

  • Wagga Wagga #1 drilling underway

  • 9 well Fairway drilling program planned for 2014

1. Operations

Permian Basin, Texas

1.1. Fairway Project - Howard & Glasscock Counties (Target 45%-60% WI)

1.1.1. Drilling

Darwin #3 (Target 60% WI)

Darwin #3 is located approximately 800 metres east of Darwin #1 and was designed to target both the Wolfberry and Fusselman sections. Drilling commenced on 23 July 2013 at 20:00 hrs (US CDT), with the well reaching Total Depth of 3,092.8m (10,147 ft) on 11 August 2013.

Continual high levels of oil and gas flowing into the lower section of borehole precluded the acquisition of open‐hole logs before running the production casing and instead cased-hole logs were acquired after setting production casing.

Subsequent testing of the deeper Fusselman carbonate showed that section to be water-wet. At the time of writing, a fracture stimulation program over zones within the Wolfberry interval had been successfully completed and flow-back had commenced.

Wagga Wagga #1 (Target 45% WI)

Wagga Wagga #1 is located 5.3 miles south east of the successful Sydney #1 well and is targeting the Ellenburger, Fusselman and Wolfberry sections. Drilling commenced on 14 October and at the time of writing, the well had reached Total Depth at 3,057.2m (10,030 ft) with wireline logging underway.

1.1.2. Forward Program

Sydney #2 (Target 60% WI)

Permitting and site works are complete for Sydney #2, with drilling scheduled for November 2013. The well will be located approximately 800 metres east of Sydney #1 and will target both the Wolfberry and Fusselman sections. It will be drilled to approximately 3,070m (10,070 ft) and is expected to take approximately two weeks to drill.

2014 Drilling Program

The partners are currently planning the 2014 drilling campaign at Fairway. In an aggressive proposed nine well program, follow-up drilling is scheduled at Darwin and BOA along with wells on the Company's Ballarat, Bunbury and Taree lease-holdings.

Louisiana

1.2. East Chalkley (Target Energy 35% WI)

The East Chalkley project is an oil field appraisal and development program, approximately 33 kilometres (20 miles) southeast of the town of Lake Charles in Cameron Parish, Louisiana. The oil accumulation, on the east flank of the Chalkley Field, is a previously unidentified down-dip oil leg associated with the gas field. Target participated in the successful drilling of the Pine Pasture #2 well in 2008.

Independent Reserve studies undertaken for Target have indicated that the field may have up to 1.7 million barrels of P50 ("most likely") technically recoverable reserves and resources, with a P10 or upside estimate of 4 million barrels of oil.

1.2.1. Drilling

Pine Pasture #3

Pine Pasture #3 was drilled from the existing production facilities with the bottom‐hole location approximately 272 metres (890 ft) south of the Pine Pasture #2 bottom‐hole location. Drilling commenced on 14 May 2013. The well was drilled to a Total Measured Depth of 3,011.5 m (9,880 ft). Wireline logs were then run on 5 June 2013 with preliminary analysis confirming the presence of approximately 8 metres of potential pay in the Alliance W2 sands, similar to -- and 24 feet updip from -- the Pine Pasture #2 oil well. The well was subsequently cased for production and the rig released.

The well has been since been completed for production and was brought on-line in mid-October. Production has been restricted by issues with the down-hole pump -- potential remedies are being pursued. In the meantime, the well has recovered the load water from the completion program and is now producing water with a slowly increasing oil cut.

2. Current Indicative Drilling Schedule

             
Estimated
Timing*
  Prospect   Location   Target
Working Interest (WI)
Completion Underway   Darwin #3 (Fairway)   Howard Co, Tx   60%
Drilling Underway   Wagga Wagga #1 (Fairway)   Glasscock Co, Tx   45%
November 2013   Sydney #2 (Fairway)   Glasscock Co, Tx   60%
Q1 2014   BOA North #3   Howard Co, Tx   60%
Q2 2014   Ballarat #1 / Wagga Wagga #2 / BOA #4   Howard / Glasscock Co   45-60%
Q3 2014   Bunbury #1 / Taree #1 / BOA North #5   Howard / Glasscock Co   60%
Q4 2014   Darwin #4 / Ballarat #2   Howard / Glasscock Co   60%
             

*Timing indicative only -- actual order, timing and well selection will vary.

3. Production (1 July - 30 Sep)

                   
Project TEX WI Gross Gas Prodn in Period (mmcf) Cumulative Gross Gas Prodn (mmcf) Net Gas Prodn in Period (mmcf) Cumulative Net Gas Prodn
(mmcf)
Gross Oil Prodn in period (BO) Cumulative Gross
Oil Prodn (BO)
Net Oil Prodn in Period (BO) Cumulative Net Oil Prodn
(BO)
Section 28 25% 41.7 2,309.3 10.4 577.3 2,075 90,345 519 22,586
East Chalkley+ 35% 2.9 43.0 1.0 15.1 2,555 107,938 894 37,778
Merta 25% 13.4 376.4 3.3 94.1 13 5,045 3 1,261
Fairway 60% 31.6 85.1 19.0 51.1 20,479 61,303 12,287 36,782
Total   89.6 2,813.7 33.8 737.5 25,121 264,630 13,703 98,407
                   

Net Production is scaled to Target's Working Interest, before royalties; mmcf = million of cubic feet; mmcfgd = million cubic feet of gas per day; BO = barrels of oil, BOPD = barrels of oil per day, BOEPD = barrels of oil equivalent per day (Target reports a thermal equivalent when combining gas and oil production, where 1BOE = 6 mcf).

4. Lease Holdings

                                 
Project   Lease / Unit   Basin   Description   Depth Limits   TEX WI   Royalty   Gross Acres   Net Acres
Fairway                                
    BOA   Permian   S12, Block 33, T-2S, A-1353; T&P RR Co Survey, Howard Co   None   60%   25%   640.0   384.0
    Darwin   Permian   S44, Block 33, T-1S, A-1292; T&P RR Co Survey, Howard Co   None   60%   25%   640.0   384.0
    Bunbury   Permian   S102 A-1405; S103 A-1405; S104 A-1495; Bl 29 W&NW RR Co, Howard Co   None   60%   25%   918.0   550.8
    Ballarat   Permian   S 184 & 185, Bl 28, A-815 & A-A483; W&NW RR Survey, Glasscock Co   None   60%   25%   355.7   213.4
    Taree   Permian   S193, Bl 28, A-815 and A-A483; W&NW RR Co Survey, Glasscock Co   None   60%   25%   320.0   192.0
    Sydney   Permian   S188 Block 29 A-170; W&NW RR Co Survey, Glasscock Co   None   60%   25%   480.0   288.0
    Unnamed   Permian   S4, Block 32, T-2-S, A-1354; T & P RR Co Survey, Howard Co   None   60%   25%   610.0   366.0
    Unnamed   Permian   S24, Bl 35 A-1538; S26 Bl 35 A-1415; T&P RR Co Survey, Howard Co   None   60%   25%   260.0   156.0
    Wagga Wagga   Permian   S221, Block 29, A-496; W&NW RR Co Survey, Glasscock Co   None   45%   25%   305.0   137.3
Merta                                
    Merta No. 1 Well Gas Unit No. 2   Gulf Coast   S3 A-219 International and Great Northern RR Co Survey, Wharton Co   7,650 ft - 7,880 ft   25%   25.7%   303.0   75.7
Section 28                                
    SML #A-1, A-3 Unit   Gulf Coast   St Martin Ph   None   25%   28%   40.0   10.0
    SML #A-2 Unit   Gulf Coast   St Martin Ph   None   25%   28%   40.0   10.0
E Chalkley                                
    Unit Agreement: CK W RA SU   Gulf Coast   S11, 13, 14 &15, T12S-R6W, Cameron Ph   8,000 ft - 10,000 ft   35%   30.5%   714.9   250.2
                    Total       5626   3017
                                 

There were no changes in Target's lease-holdings during the reporting period.

Laurence Roe
Managing Director

NOTE: In accordance with ASX Listing Rules, any hydrocarbon reserves and/or drilling update information in this report has been reviewed and signed off by Mr. Laurence Roe, B Sc, Managing Director of Target Energy, who is a member of the Society of Exploration Geophysicists and has at over 30 years' experience in the sector. He consents to that information in the form and context in which it appears.

Contact Information

  • Media Inquiries:
    USA
    Bradley Holmes
    Target Investor Relations (Houston)
    +1 713 304 6962 cell
    +1 713 654 4009 direct

    Laurence Roe
    Target Energy
    +1 713 275 9800 direct

    Australia
    Ross Dinsdale
    Business Development Manager (Perth)
    +61 429 702 970 cell
    +61 8 9476 9000 direct