Bass Oil Prepares for Kiwi-1 Extended Production Test

Commencement of Kiwi-1 Extended Production Test

Bass Oil Limited (ASX:BAS) has announced that the Wild Desert Rig 10 is currently mobilizing to the Kiwi-1 well site. This follows the completion of minor repairs to the access road after recent rains. The rig is expected to commence well completion operations on or about 18 October.

The well completion operations are anticipated to take approximately 7 working days. Immediately thereafter, the Extended Production Test (EPT) will begin. The EPT aims to confirm the production profile of the Kiwi-1 well and sample the produced gas and fluids to determine their composition during a 14-day flowing period.

Objectives and Potential Impact

The EPT will also include a pressure build-up survey lasting up to 60 days. This survey aims to obtain a reservoir pressure for reserve determination and assist in characterizing the reservoir geometry. Managing Director Tino Guglielmo expressed optimism about the test, stating that a successful outcome will confirm the commercial viability of the Kiwi gas discovery.

Guglielmo highlighted that a successful test at Kiwi-1 could significantly enhance the recoverable gas potential of the area. This comes at a time when the Eastern Gas Market is experiencing elevated pricing due to predicted shortages.

Market Context and Future Prospects

The release of the Australian Energy Market Operator's (AEMO) recent annual Gas Statement of Opportunities (GSOO) report has underscored the need for substantial development of gas reserves. The report forecasts a shortfall of gas supply as early as 2027. Gas sold on domestic spot markets or supply hubs this year has attracted prices over A$10/GJ, peaking at over A$20/GJ during periods of high demand or constrained supply.

Bass Oil continues to focus on accumulating a portfolio of gas reserves to capitalize on these favorable market trends. The commercialization of the Kiwi gas discovery and adjacent prospects is a critical first step, followed by studies on the substantial gas resource potential of the deep coals at Bass' 100% owned PEL-182.

Background and Upside Potential

Kiwi-1 was initially drilled in 2003 as an exploration well, resulting in a Triassic age, Callamurra Member gas discovery that flow tested at 9.6 million cubic feet per day on drill stem test. Bass has since interpreted a 3D seismic survey over the area, upgrading the potential size of the Kiwi discovery to a mean Contingent Resource of 5.24 BCF and a 3C Contingent Resource of 11.5 BCF.

The company has identified other prospects and leads on trend with Kiwi-1. A successful commercialization of the Kiwi field resulting from this test could add significant upside to the recoverable gas potential of the area.