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 the field. 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.

Development of the Warro field has included to date:

• Drilling, stimulation and flow testing of Warro-03 – March 2009 to October 2009
• Warro 3D Seismic Acquisition – March 2011
• Drilling, stimulation and flow testing of Warro-04 – April 2011 to November 2011

Both Warro-03 & 04 have been drilled using the Weatherford owned and operated Rig 826, the only rig currently available for drilling at depths up to 5000m. Well stimulation is conducted by Halliburton Australia under the guidance of John Ely and Associates, a US based firm specialising in tight gas.

Acquisition of the 3D seismic was approved by the Dept. Mines and Petroleum in March 2011 and took approximately three weeks excluding line preparation. This acquisition is the first to be approved in a National Park (Watheroo) and exhaustive environmental preparation and follow up is part of the acquisition process and continues today.

Warro-03 was drilled and stimulated successfully over eight zones. Extended well testing resulted in water production which inhibited raising the gas to the surface. Warro-04 was drilled and stimulated successfully over two zones.  Extended well testing also resulted in water production which inhibited the raising of gas to the surface..

Analysis

A group of independent experts based in the USA completed an analysis of the available data on the field including the 3D seismic.  This analysis confirms the significant gas held in the field with the potential to flow at high rates. The presence of water in deep seated faults below the gas field has been determined as the cause of water in Warro-03 and Warro-04.  The management of water in tight gas wells is a regular occurrence in developed tight gas industries and these methods will be explored and utilised for the continued development of Warro.

It should be notedthat all water at depth is under pressure.  The pressure below 4300m is above normal hydrostatic but the volume of water involved is very limited.  The water is held in a few deep-seated faults which do not promulgate more than a few hundred metres into the gas bearing zones.  The rocks that are cut by the faults are exceedingly tight and could not be considered aquifers by any measure.  It must be understood that these deep-seated faults are thousands of metres below any rocks which could be considered aquifers.   At Warro the faults are completely separated from overlying rock by the casing and cement used to seal the wells so there no connection through the wellbore.

The Future

Latent is now evaluating the reports received and preparing submissions to the Joint Venture for the next stages of the project.  The scheduling of the next well(s) is heavily dependant on equipment availability, mutually beneficial industry cooperation and government assistance.  Latent is confident of the future development of the Warro field.

Transerv’s History with Warro

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, Transerv elected to convert the $3.6m seed capital loan facility into a 10% project interest in Warro on the same terms as Alcoa.  Alcoa will earn a65% interest through funding a staged farm-in evaluation program, which includes a 5 well drilling program, seismic surveys and production facilities for initial production.

On 23 March 2011, Transerv announced the acquisition of Latent Petroleum Pty Ltd. This acquisition increased Transerv's interest in Warro to 35% after the completion of the staged and earned farm in by Alcoa Australia.