AWE could commercialize new sources of gas in Western Australia’s Perth Basin by mid next year after discovering an estimated 149 billion cubic feet (Bcf) of gas at the Irwin and Synaphea structures.

The company announced to the market that initial results from the Irwin-1 exploration well, located in the onshore Perth Basin, had been drilled to a total depth of 4,049 m, intersecting the primary target, the Dongara/Wagina sandstones, at 3,146 m.

Wireline logs indicated a 32 m gas column in the Dongara/Wagina tight gas reservoir with a gas/water contact interpreted at 3,085m total vertical depth subsea.

AWE said this was the same depth as the log indicated gas/water contact in Warradong-1, previously drilled in the adjacent Synaphea structure, 4.5km to the south.

“The common contact suggests that these two wells may have intersected the down-dip portion of a single large gas accumulation that includes both the Irwin and Synaphea structures,” AWE said.

AWE estimates gross 2C contingent resources of 15 Bcf of gas for Irwin and 134 Bcf of gas for Synaphea.

In light of the Irwin-1 discovery, additional Dongara/Wagina prospectivity has been identified within the L1 permit and work is underway to assess the potential of these leads.

Meanwhile, AWE wasn’t so lucky at the Kingia Sandstone interval at Irwin-1 which was found to be water bearing.

“This outcome was not unexpected as the Kingia was penetrated below the interpreted gas-water contact at Waitsia, AWE said.

AWE managing director Bruce Clement said the latest results further highlight the potential of the company’s Perth Basin assets.

“AWE is rapidly building a large inventory of conventional and tight gas resources in the north Perth Basin,” he said.

“Importantly, in addition to the significant new Dongara/Wagina discovery, Irwin-1 has intersected the Kingia formation 8km east of Senecio-3, confirming the lateral extension of the Kingia reservoir sands, as well as providing valuable data on reservoir quality and gas/water contact.”

AWE is now preparing to drill the Waitsia-1 appraisal well on the Waitsia gas field later this month.

“Subject to well results and obtaining the necessary regulatory approvals, we are targeting early production from an initial phase of development by mid-2016,” Clement said.

The Irwin-1 exploration well was spudded on March 25 and is located about 22.7 km east of Dongara.

The Irwin structure straddles the EP320 (AWE 33%) and L1 (AWE 50%, operator) boundary and the Irwin-1 drilling program is being operated by AWE under an agency agreement with joint venture partner, Origin Energy.

Shares in AWE fell 3.5% to $1.51.

Contact the author, Lauren Barrett, at lbarrett@hartenergy.com.