Perth Basin Production

Onshore

ARC’s onshore fields in the Perth Basin are low cost delivering oil by truck to the BP Kwinana Refinery and gas directly to customers via the under-utilised Parmelia Pipeline.

Total production from the onshore Perth Basin gas and oil fields is approximately 8,000 barrels of oil equivalent per day (boepd).

Hovea Oilfield (ARC 50% & Operator)

First discovered
October 2001
Production commenced
February 2002
Production to 31 August 07
6.4 million barrels
Average daily production as at 30 September 07
~ 2000 barrels per day

The Hovea-1 well was drilled in October 2001 and oil was discovered in the Dongara Sandstone formation. 3D seismic surveys of the area were acquired in January 2002, and in June 2002 the Hovea-2 well found a High Cliff Sandstone gas pool which flowed at 16.5 MMcf/day of gas.

In August 2002, the Hovea-3 well encountered a 26-metre oil column, and the decision to fully develop the Hovea Field was made in October 2002.

The Hovea development represents a number of very significant milestones for both the joint venture and for Western Australia. Hovea was the first commercial oil discovery in the Perth Basin since 1966 and the first onshore oil field in WA to be brought to commercial production in 20 years.

Eremia Oilfield (ARC 50% & Operator)

First discovered
March 2003
Production commenced
May 2003
Production to 31 August 07
1.3 million barrels
Average daily production as at 30 September 07
730 barrels per day

The Eremia Oilfield is located 2.5 kilometres to the west of the Hovea Production Facility, and was placed on production through temporary facilities only six weeks after the rig was released. A second development well and a water injection well were subsequently completed and a flow-line back to the production facility together with a gas lift line from Hovea to Eremia have been installed to maximise production.

Mt Horner Oilfield (ARC 100% & Operator)

First discovered
1965
Production commenced
May 1984
Production to 31 August 07
1.6 million barrels
Average daily production as at 30 September 07
63 barrels per day

The Mt Horner field, acquired by ARC in February 2004 is currently at a mature stage of its life and was shut-in for refurbishment in 2006. The field is now re-opened and production is trucked to the Kwinana Refinery south of Perth.

Dongara Gasfield (ARC 100% & Operator)

First discovered
1966
Production commenced
October 1971
Production to 31 August 07
452,627 MMcf
Average daily production as at 30 September 07
~6 MMcf per day

Discovered in 1966 by WAPET, the Dongara field is now wholly owned by ARC.

Production from the field has been optimised by installing wellhead compression and workovers of existing wells to ensure the full recovery of remaining reserves. Dongara wells 36 and 37 were drilled in 2006 and 2007 respectively, further enhancing production.

ARC purchased the Dongara Processing Facility in September 2005 from APT Parmelia Pty Ltd which still owns the Parmelia Pipeline. The processing facility is a key upstream infrastructure asset.

The Dongara Processing Facility is the largest gas processing facility in the Perth Basin and provides gas separation, dehydration and compression via four 1,000 hp gas turbine driven compressor units. It also has a central control facility and workshops, condensate storage and load-out facilities, and a water treatment and disposal system. The plant is situated on approximately eight hectares of freehold land which was also included in the purchase.

XAGGS Project, Xyris Gasfield, Xyris South Gasfield, Apium Gasfield (ARC 50% & Operator)

First discovered
March 2004
Production commenced
November 2004
Production to 31 August 07
5,808 MMcf
Average daily production as at 30 September 07
~10 MMcf per day

Initial drilling in 2004 at the Xyris 1 well resulted in intersection of a significant gas column which subsequently flowed at rates of up to 15.5 MMcf/d. The following well, Apium 1, also intersected a gas column and tested at a rate of 1.9 MMcf/d.

The Xyris plant was commissioned in November 2004 and other gas reserves in the area, including Xyris South and Apium, were also developed into production, assisted by the completion in 2005 of XAGGS (Xyris Area Gas Gathering System) project link to the Parmelia Pipeline.

Woodada Gasfield (ARC 100% & Operator)

First discovered
May 1980
Production commenced
May 1982
Production to 31 August 07
51,724 MMcf
Average daily production as at 30 September 07
1.3 MMcf per day

A total of 18 wells at Woodada have been drilled to date, six of which are currently producing. Processing facilities at Woodada include separation and compression units, a gas drying and sweetening unit, evaporation ponds and a condensate gas storage tank.

Jingemia Oilfield (ARC 44.141% Origin Operator)

First discovered
October 2002
Production commenced
May 2003
Production to 31 August 07
3.33 million barrels
Average daily production as at 30 September 07
1,600 barrels per day

Initial drilling of the Jingemia 1 well in 2002 encountered an approximate 30 metre gross oil column which subsequently produced at rates in excess of 2,000 bopd.

The field has been progressively developed with a number of additional wells drilled, the most recent being Jingemia 11 in 2006. Production, however, has been lower than expected due to a number of operational issues.

Beharra Springs Gasfield (ARC 33% Origin Operator)

First discovered
1990
Production commenced
June 1990
Production to 31 August 07
86 bcf
Average daily production as at 30 September 07
11.2 MMcf per day

Production from Beharra Springs peaked at 33TJ per day in 1997 but has since declined. Reservoir quality at the gasfield is excellent, but little development activity was undertaken until 2002 when a 3D seismic survey defined additional drilling locations—including Beharra Springs 4 and Tarantula—which has boosted reserves and has prolonged field life.

The Beharra Springs Gas Plant is capable of processing up to 35TJ per day, and any additional discoveries can be cheaply and quickly brought into production through the plant.

Offshore

ARC’s producing offshore operations include the Cliff Head Oilfield, the first commercial oil discovery in the offshore Perth Basin.

The field has established the offshore Perth Basin as Australia’s fourth offshore oil producing region, after Bass Strait, the North West Shelf and the Timor Sea.

The area represents an oil asset at early field life with good regional exploration potential in ARC’s core Perth Basin area.

Cliff Head Oilfield (ARC 30% ROC Operator)

First discovered
2001
Production commenced
May 2006
Production to 31 August 07
3.96 million barrels
Average daily production as at 30 September 07
11,700 bopd

The Cliff Head Oilfield is located 10 kilometres offshore from Dongara in 15 metres of water. Oil production is through an unmanned monopod and pipelines to the onshore Arrowsmith stabilisation plant.

The field has six production wells and two water injection wells, with oil produced via electric submersible pumps. The oil is trucked to the BP Kwinana refinery south of Perth as for ARC’s onshore fields.

Initial oil is place has been estimated at 67 million barrels, and system design capacity is 15,000 bopd. The project is at an early stage of development and has potential upside from higher than predicted recoveries from undrained parts of the structure.