Ash Creek Update
HIGHLIGHTS
• The workover of Trusler #9 is completed in the Lower Shannon and ready to re-inject Ash Creek produced water.
• Testing the injectivity of the Lower Shannon of Trusler #9 suggests it is capable of handling the expected volumes of produced water from Trusler #1 and #8 (and future wells).
• A pumping unit was installed on Trusler #8 last week.
• The installation of production facilities is progressing and the laying of flow lines is complete.
• The installation of the last of the process and injection facilities, including buildings and heating equipment are expected to be completed in mid December when production can commence. Production will not start until heating capability is in place.
BACKGROUND INFORMATION
Elk’s field re-development plans for Ash Creek, the potential oil volumes being targeted by this program, and forward plans were provided to shareholders and the market in an ASX release dated 15th April 2010. The re-development activities were last updated on the 2nd November 2010; these releases and others associated with the re-development of Ash Creek are available on the Company’s website.
PROGRESS
Trusler #9 was completed as an injection well in the Ash Creek Lower Shannon formation last week. Swabbing of this formation indicated no oil shows as expected given the well’s down dip completion position. A flow line from the processing facilities has been installed to Trusler #9 to enable it to act as the first injection well into which produced water from Ash Creek production wells will be re-injected. Injectivity tests indicate that initially this well will be capable of handling injection volumes in excess of 2,000 barrels of water per day (BWPD) and therefore, water flooding of the Lower Shannon formation using Trusler #9 should be possible.
The Trusler #1 and #8 production wells are now ready to start production after a pumping unit was installed on Trusler #8 last Thursday (see photograph). However, commencement of production is dependent upon the completion of infrastructure, most particularly building a permanent building and heating plant for some critical process equipment, given nights are now at or below freezing. This step will reduce the risk of water freezing in equipment and causing damage and avoidable delay for thawing operations and possible repairs. The target start up for Ash Creek production is mid-December.
On behalf of the Board,
Bob Cook
MD/CEO
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