Linc Energy Ltd. plans to drill three wells in the Arckaringa Basin in South Australia as part of the next phase of exploration and development of the asset.

Given the size of the potential resource, the board of Linc Energy has determined that the best option is to fund the targeted exploration program to better define the basin before the company considers partnering for Phase 2 or Phase 3 of development. The program will be funded within the company’s budget, Linc said in a press release.

As part of this strategy, Linc Energy has engaged with Baker Hughes as shale expert and advisor on the program. Baker Hughes has completed a comprehensive study and produced a detailed model on the basin regarding the following: geomechanical modeling; wellbore stability analysis; hydraulic fracture design; prediction of multiphase flow performance; simultaneous inversion analysis of seismic data; optimizing well planning and design; and preliminary development plan to transition the resources to reserves for development.

Conclusions of the study have been used to assist Linc Energy with the design of the three-well exploration program to test the deeper, more prospective parts of the basin, according to the release. The drilling program is likely to be focused on the Boorthanna Trough, which formed the basis for the majority of the prospective resources separately identified by Gustavson Associates and DeGolyer and MacNaughton as previously announced. To date, no previous drilling has intersected the formations at depth, and the results of these wells will be critical to understanding the basin in detail.

Samples and the core recovered during drilling will be sent for analysis of rock layers within the targeted formations with the most prospective source rock, according to the release. Analysis will include:

  • Thermal maturity to confirm thermal gradient projections in each of the three holes;
  • Source rock to confirm source rock quality of Stuart Range, Boorthanna and pre-Permian formations;
    Intersection of at least one of the conventional oil and gas targets identified by Gustavson as a prospective resource;
  • Logging of all core holes; and
  • Openhole well testing if moveable hydrocarbons are detected.

Assessment of the data collected in this first phase of drilling will determine the next development steps. Subject to drilling results and board approval, the company said it will look to follow up this initial three-well program with a further three wells to commence late this year.