Oil field back on track after major flood event

OIL production has recommenced at Senex Energy’s Snatcher oil fi eld in South Australia’s Cooper Basin, after appraisal activites were halted in January 2012 by flooding. The company described the flood as a “one-in-forty-year” event that inundated
the field and isolated its two producing wells, Snatcher-1 and Snatcher-2. The Snatcher oil field is held by a joint venture between Senex and Beach Energy: Senex holds a 60 per cent interest in the exploration licence area and is operator of the joint venture, with the remaining 40 per cent interest held by Beach. Following the flooding, Senex did not regain access to the field until late 2011; the company began work on reinstating production
from the two wells in January 2012, as well as completing a third well, known as Snatcher-3, for production. Reinstatement works were disrupted a number of times by localised rain and flooding, delaying work for several weeks. Notwithstanding those delays, Senex constructed causeways to the isolated Snatcher-1 and Snatcher-2 wells and completed construction of new production facilities for the field.
“New hydraulic pumping units are currently being installed at Snatcher-1 and Snatcher-2, to reinstate production of the rod-pumped wells, with the flood damaged beam pumps remaining in-situ but non-operational,” Senex reported in early May.
Senex managing director Ian Davies said planned development work at the company’s Snatcher field was expected to result in a rapid increase in production from the field in the 2012 to 2013 fi nancial year.
“Before the field was inundated in 2010, Snatcher-1 and Snatcher-2 were producing more than 500 barrels of oil per day (gross) from the mid Birkhead channel sands,” he
“We expect to reinstate production from those wells within weeks and have agreed on an accelerated program for the field with our joint venture partner [Beach].” Senex and Beach have agreed to drill two new appraisal wells, Snatcher-4 and Snatcher-5, at the field, with drilling at Snatcher-4 expected to begin within the coming weeks.
On May 1, Senex announced to the market that it had been advised that BG Group subsidiary QGC had sold 73.9 million shares it held in Senex. The shares, equivalent to 8 per cent of Senex’s issued capital, were sold in a $75 million institutional bookbuild managed by RBS Morgans to domestic and international fund managers and professional investors. In a statement, Mr Davies described the sale as “a rare opportunity for institutional investors to quickly acquire meaningful exposure to Senex”.
“We are delighted that strong interest from institutional investors translated into an overwhelming demonstration of financial commitment,” Mr Davies said. “This transaction has fortifi ed the capacity of the Senex share register to support accelerated resource development in the Cooper Basin.”

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