Carnarvon Faces Another Buffalo Drilling Start-up Delay

Australian oil and gas firm Carnarvon Energy expects to spud its Buffalo-10 well in the Timor Sea in late December and not in mid-December as previously expected.

The company said Monday that the Valaris JU-107 jack-up drilling rig was "still on its current operations, and the handover of the rig to Carnarvon is now expected to be in late December."

"The delays are not related to the performance of the rig or preparation by Carnarvon. The current operator of the rig is undertaking its final operation, after which the rig will be handed over to Carnarvon," the company said.

To remind, Carnarvon in September said it expected to spud the Buffalo-10 well in the Timor Sea in early November.

According to Valaris' October fleet status report, the rig is on a contract with Jadestone. 

The Buffalo project involves the redevelopment of the Buffalo oil field in the Timor Sea. The field resides in only 30 meters of water with a reservoir depth between 3,200 and 3,300 meters below the sea bed. The previous field proved the existence of a very high deliverability reservoir containing high-quality light oil that is expected to sell at a premium to Brent in today’s market, Carnarvon explained.

Carnarvon, as the operator of the project, is preparing to drill a well that will penetrate the existing oil column (because the field was still producing when it was shut-in in 2004), and assess the extent of the revised mapped attic oil column.

Carnarvon’s mid-case recoverable volume estimate is 31 million barrels (gross, 2C contingent resource). With the minimum economic field size estimated to be significantly lower than the mid-case estimate, there is a strong likelihood the Buffalo-10 well will confirm an economic project, Carnarvon said.

Accordingly, Carnarvon’s drilling plans provide for the Buffalo-10 well to be retained as the first production well in the redevelopment program.  

Carnarvon also said it was working with its project partner, Advance Energy Plc, on plans to compress the timeline to first production once the Buffalo-10 well confirms a commercial oil resource. These plans include engaging with the industry for the supply and installation of suitable equipment to produce the oil.