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juniors skyrocket after dual oil strike

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    Juniors skyrocket after dual oil strike
    By Jane Williams
    September 24, 2003

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    Two oil strikes in two days have added millions of dollars to the market capitalisation of oil juniors Stuart Petroleum and Cooper Energy NL.

    The second strike, announced yesterday, at the Worrior-1 joint venture in the Cooper Basin yielded strong flow rates of 2880 barrels of oil per day (BOPD).

    Its significance was increased by the fact that it was at an interval level and not one of the project's target sites, Cooper chairman Greg Hancock said.

    The discovery follows Monday's announcement that a strike at a primary target in the shallower Namur formation revealed flows of 1600 BOPD. Further drilling was expected to hit a second primary target, the Patchawarra formation (at 1713 metres) and the planned total depth of 1830 metres later this week, Mr Hancock said.

    Yesterday's strike confirmed the well had the potential to be the largest find in the Cooper/Eromanga Basin since Moomba was discovered in 1997, he said.

    With at least two commercial zones now apparent, Cooper said the well's previous recoverable target of 1.5 million barrels of oil was now notably on the low side.



    The market responded enthusiastically to the finds, with shares skyrocketing. Stuart Petroleum closed yesterday up 11¢ at 56¢ from Friday's close of 40¢. Cooper Energy closed 6.5¢ up at 22.5¢, from 14.5¢ on Friday.

    Intersuisse analyst Gavin Wendt said Cooper's market capitalisation rose $3 million as a result of the Worrior-1 discoveries, and Stuart's value rose $10 million in the past two days.

    "Based on the fact they've still got to get to their target reservoir, there could still be a fair bit more upside in the share price," he said. "These are excellent flow rates. I don't think I've seen flow rates like this in the Cooper Basin . . . in the last 12 to 18 months since there's been this renewed activity."

    Stuart chief executive Tino Guglielmo said the significance of the new discovery would be fully evaluated following the acquisition of wireline logs at the completion of drilling.

    Mr Hancock said the Worrior-1 well, 55 kilometres south-west of Moomba in PEL 93, confirmed the south-western flank of the Cooper/Eromanga Basin in South Australia as an important migration path for oil.

    The well is set to produce by Christmas or early next year.

    - AAP
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