MOSAIC OIL NL 2002-06-17 ASX-SIGNAL-G
HOMEX - Sydney
+++++++++++++++++++++++++
(ATP471-MYALL BLOCK-SOUTH EAST QLD)
The Churchie well has reached TD at 2124 metres.
The Churchie 3 well intersected the primary target zone on Sunday
afternoon and flowed gas at 20 million cubic ft a day through a 1
inch choke with a stabilised surface flowing pressure of 743 psi from
the Permian Tinowon Sandstone. Condensate and LPG are present and
their levels will be released to the market as soon as laboratory
analysis has been completed.
This is one of the largest gas flows recorded in the Surat/Bowen
Basin area of Queensland and indicates the potential of a virtually
untapped Permian province controlled by Mosaic Oil.
The Chairman of Mosaic Oil Dr Don Stammer remarked: "The
Churchie-Noorindoo complex is a company maker that could be worth
around $125 million to Mosaic Oil".
The flow is from a 27 metre interval from 2097 metres to 2124 metres.
The Churchie No 3 well is situated about 6 kilometres from a main gas
trunk pipeline near the town of Surat in south-east Queensland.
Although Santos is a participant in the field the well was drilled
100% by Mosaic Oil. Santos has a buy back option into the Churchie 3
well at a significant premium. The two companies have been in
discussion this morning and will now begin to discuss field
development and gas marketing.
Mosaic has the right to drill one more solo risk well (Norkam 1) in
the Churchie - Noorindoo complex provided the well is spudded by
early November 2002.
Dr Howard Brady CEO said: "We have followed (with their advice) the
techniques of the Canadians who cracked the key to the Canadian
Permian rocks which other companies did not understand. The Churchie
3 well indicates that the large potential of the Permian rocks has
been hidden by damage done by drilling muds. Future air/nitrogen
drilling can now unlock the large potential of these rocks".
Dr Brady further remarked: "Mosaic stands by earlier comments that
the Churchie structure has the potential to hold well over a hundred
billion cubic ft of recoverable gas. The Churchie-Noorindoo
structure as presently mapped covers 50 sq kilometres".
Interest in Churchie 3 well: Mosaic 100%
Interests in the Churchie-Noorindoo Complex: Mosaic Oil 49%(Operator)
Santos Group 51%.
Steven C McDowell,
COMPANY SECRETARY
For comment please contact myself or Dr Howard Brady on 9247-9324.
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