The Warro Gas Field is contained within EP 407 and EP 321 onshore in the Perth Basin. The field is located approximately 200 km north of Perth and 31 km east of both the Dampier-Bunbury Natural Gas Pipeline (DBNGP) and the Dongara-Perth Parmelia Pipeline (PP).

The Warro Field was discovered in 1977 by WAPET when Warro-1 intersected a substantial gas saturated column.  The follow up appraisal well, Warro-2 confirmed a 390 metre gas column in the Yarragadee Formation.

The Warro structure is a large compressional anticline with 17,000 acres of four way dip closure, defined by a grid of 2D seismic.  Volumetric estimates by previous operators indicate a total Gas Initially In Place (GIIP) of up to 7.5 Tcf contained in the Warro structure.

Development of the Warro Field did not occur in the 1970s because the discovery was a tight gas field and uneconomic at the prevailing low gas prices (approximately $0.20 per Mcf).   Additionally, hydraulic fracture technology at the time was not sufficiently advanced to successfully stimulate a reservoir at this depth due to the high pressure and temperature encountered.

Testing in 1977 of two zones on Warro-2, after fracture stimulation with water based fluids, flowed 80 Mcf/d and 104 Mcf/d respectively. Since the 1990s there has been a step-change in fracture stimulation and completion technology for tight gas fields.  In 2007, Latent commissioned Schlumberger’s USA based fracture stimulation team to evaluate all available data to amongst other things, determine the likely range of production outcomes from development wells.  Schlumberger reported that vertical wells into the Warro Field are expected to yield in excess of 6 Bcf each with an initial rate >6.5 MMcf/d while horizontal wells may produce upwards of 20 Bcf with an initial rate of >25 MMcf/d.   

Schlumberger has reported that the Jonah Field, a tight gas field in southwest Wyoming, is an excellent analogue for Warro.  The Jonah Field was discovered in the 1970s but because fracture stimulation treatments were unsuccessful at that time, wells that tested positively for gas were plugged and abandoned.  In the mid 1990s a gas discovery well was re-entered and stimulated effectively.  Today the Jonah Field is one of the most prolific gas fields in North America.  It currently produces 680 MMcf/d from 2,400 wells with a total estimated ultimate recovery of 14 Tcf.

Schlumberger noted that Warro reservoir characteristics are more favourable than those of Jonah in a number of important areas: the thicknesses of the Warro pay intervals are greater, more laterally continuous and have higher permeability than in Jonah.  The lateral continuity of these sands suggests that wells in the Warro Field will drain larger areas, making the Warro Field a candidate for horizontal drilling.  This would reduce the number of wells required to develop the Field and enhance its economics.

Development Plan

At this stage, possible development timing, subject to the necessary approvals, is:

Q4 2008     Undertake drilling program to confirm resource/reserves
Q1 2009     Undertake construction of 30km pipeline
Q1 2009      Undertake 3D seismic survey over western portion of field
Q3 2009    Begin production of natural gas.

Latent announced in a press release on 8 January 2008 that it has secured two drilling slots on a new 1,500hp National rig capable of drilling beyond 5000m.  The rig is scheduled to arrive in WA in October 2008 and will commence operations at the Warro Gas Field during December 2008.  Latent Petroleum plans to drill the two wells during 2008 and carry out well testing operations to determine the optimum means to extract gas from the Warro Gas Field.

Transerv’s Interest or Introduction

In November 2007 Transerv entered into a funding arrangement to provide Latent Petroleum Pty Ltd (Latent) with a $3.6m seed capital loan facility to secure a right to acquire up to a 10% interest in the Warro Gas Field. Latent owned 100% of the Warro Gas Field and this project is its sole focus.  

On 13 June 2008, Transerv announced that Alcoa of Australia Limited had entered a farm in agreement with Latent on the Warro Project, which crystalised the conversion of Transerv's $3.6m seed capital loan facility into a 10% project interest in Warro.Alcoa will earn a 65% interest in the Warro project through funding a staged evaluation program including the drilling of multiple wells, production infrastructure and seismic surveys.  Under the terms of the deal, Transerv will be free carried for the first $40m of Alcoa's project expenditure.