Carpathian Projects - Janovice Gas Field

Projects >> Janovice

Janovice Gas Field (60% interest)

Highlights of the year:

- start of commercial production on 31 October 2005
- major upgrade in the gas-in-place in January 2006

The Janovice block is located in Northern Moravia, Czech Republic. It is situated some 20 km, south of Ostrava, a major industrial centre and five kilometres from Carpathian’s 50% (75% before payout) owned Krásná oil field. The Ja3a discovery well was drilled between 16 March 2004 and 11 April 2004 when it reached a total depth of 1,108 metres. The pipeline link to the national transmission system, paid for by Carpathian’s partner as part of the farm in agreement, was completed in October 2005 when the well was brought on stream.

The initial analysis and testing of the well indicated a net gas column of about 33 metres with gas in place of 1.5 to 1.7 billion cubic feet (43-48 million cubic metres), based on data collected during a short production test. In January 2006, after the well had been in production for just over 2 months, a scheduled second production test was carried out to better determine the amount of gas in place. The result of this second and more reliable test was that the estimate of the gas in place was increased to 3.8 to 4.0 billion cubic feet (108-113 million cubic metres).

Since the field was brought on stream it has produced without interruption except for the test period and a brief period in January when the production equipment was affected by exceptionally low ambient temperatures. Even though this cold weather has been followed in Europe by an exceptionally hot summer there has been no weakening of the gas price since the last increase in April.

At the end of June 2006 the field was producing at a steady rate of 34 million cubic metres per day (1.2 million cubic feet per day). Provided there are no changes Carpathian will receive AUD $1.9 million (£790,000) p.a net of operating costs in calendar year 2006.

As economic conditions as well as production rates determine the ultimate recovery from a field the results for the first half of the calendar year 2006 bode well for the target of 80% recovery of the gas-in- place over the life of the field.

Following the success of the Ja3a it was decided to drill a step out well to test a second Karpat Sandstone objective, a 6.5 bcf prospect 1.5km northwest from the Ja3a well. The well was spudded on 4 October 2005 and cut a 10 metre thick, porous sand of probable Miocene Karpat age at 890 metres before total depth was reached in Palaeozoic strata at 944.5 metres drill depth. Although analysis of the wireline logs indicated signs of gas in the upper part of the sand, a drill stem test recovered only water.

A seismic survey was completed in the second half of 2005. The survey was targeted at defining gas prospects on trend with the Janovice field and providing a more complete understanding of the Janovice field. Processing and reprocessing took up the remainder of the year and the initial interpretation was completed by the end of March. A second report from the geophysical contractor, incorporating detailed analysis of the seismic amplitudes was received at the close of the second quarter of 2006. The results of the two reports must be integrated before a decision can be made on how best to further the exploration of the permit and to define new drilling targets, both on the permit and on the Janovice production license as soon as possible.

A review of the interpretations suggest that further geological input is required to be included in the geophysical interpretation and this will be pursued in the coming months. Although the seismic is of good quality, the ‘picking’ of controlling faults has been difficult and while several attractive features have been recognised more work is needed in order to reduce the exploration risk.