Australian oil and gas company Karoon Energy plans to drill a control well and, subject to the results of that well, a second control well in the Neon oil discovery, offshore Brazil.
"This decision is based on extensive pre‐development studies which have determined that a potential development of the Neon discovery presents a potentially attractive investment option for Karoon," Karoon said Friday.
The drilling strategy has been designed with the specific goal of reducing subsurface uncertainty to a sufficient degree to enable progress towards a potential Final Investment Decision (FID), Karoon said.
Subject to the receipt of required environmental licences, the new well or wells, internally named Echidna‐2 and Echidna‐3, are currently planned to be drilled at the conclusion of the Patola Development campaign, Karoon said.
The Neon light oil discovery was drilled by the Echidna‐1 well in 2015 in licence BM‐S‐10371.
The discovery is located 50‐60km north‐east of the Company’s producing Baúna oil field at a water depth of approximately 300 meters, with light (39o API) oil tested at a facility constrained stabilized flow rate of 4,650bbls/day.
Commenting on the decision to commit to the Neon drilling campaign, Karoon Energy’s Chief Executive Officer and Managing Director, Dr Julian Fowles, said: "Today’s decision to proceed with the drilling of up to two Neon control wells is a further exciting step for the Company as we continue to progress our growth opportunities, and reflects the hard work and dedication of our teams in Australia and Brazil.
"The drilling at Neon will help us to further evaluate the commerciality of a potential Neon field development with a focus on seeking to maximize oil recoveries in the most cost-effective and value-adding manner. If subsurface uncertainties can be sufficiently reduced, Neon provides Karoon with the potential for a standalone development or a tie‐back to our existing operations at Baúna.
"A potential Neon development will, like all other organic and inorganic growth options for Karoon, be assessed through a rigorous and disciplined technical and commercial process with a view to maximizing value for our shareholders and pursuit of our carbon-neutral future.”