Xanadu-1 Well Intersects Hydrocarbons
- Xanadu-1 Intersects Hydrocarbons: TEG have confirmed that Xanadu-1 has intersected hydrocarbon bearing reservoirs. This was demonstrated by elevated gas readings, oil shows, fluorescence and cut-fluorescence which were encountered while drilling reservoir sections. The JV is now in the process of running a wire line logging suite in order to better understand the nature of the hydrocarbons intersected in the well. The drilling of the well has gone very well and as a result the JV has elected to drill below the original depth to the base of the Holmwood Shale which will give the JV a complete picture of the prospect. It has also been decided to order casing to so that the JV can elect to complete the well in preparation for a production test pending the results of the upcoming logging program.
- DJC Capital Raising Successfully Completed: TEG has completed a placement of shares to raise $1.4m to sophisticated investors which was managed by DJC. A fee was paid for this service. The additional funding will be used to bolster the balance sheet and contribute to the Xanadu-1 well program.
The Xanadu prospect has been known about for many years and up until now it was one of the largest unexplored oil prospects in the Perth Basin. One of the key risks has been trap seal and the fact the drill intersected hydrocarbons in the reservoir has helped to mitigate this risk. While it is not yet clear if the oil is movable or whether the well will be declared a commercial discovery, the signs at this early stage of are very encouraging. We can expect ongoing news flow over the next few weeks as the JV interprets the results. The initial unrisked estimates were 160m barrels of oil but even if there is only 10% of this number in the reservoir, Xanadu could become a transformational asset for the JV partners. A discovery will also be capable of being rapidly commercialised thanks to the proximity of the Arrowsmith facility which can process up to 15,000 barrels of crude per day.
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