Aurora Oil & Gas
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Drilling for Success
Aurora Oil & Gas Limited is an Australian Stock Exchange listed company focused on oil and gas exploration and production in North America that began operations in early 2005. The initial plan for the development of the company’s oil and gas interests is focused on the U.S. where large markets and existing infrastructure provides the opportunity for attractive economic returns.
Since the start of operations, Aurora has established a significant portfolio of U.S. oil and gas interests that includes exploration, development and production. Aurora anticipates a significant year in terms of value creation from drilling, testing, production and land acquisition.
Overview of projects
Sugarkane Gas and Condensate Field
Aurora has established a substantial landholding position within the Sugarkane Gas and Condensate Field Texas, providing the company with the opportunity to benefit from a multi trillion cubic feet equivalent (tcfe) gas and condensate resource. Most notably, Sugarkane Gas and Condensate Field has been referred to as, “a substantial Austin Chalk/Eagle Ford discovery.”
Discovered in 2006, the Sugarkane field is a unique reservoir that lies some 20 km south of the main Texas Austin Chalk trend and within the emerging Eagle Ford Shale play. Generally speaking, the Sugarkane field consists of a high quality Austin Chalk reservoir directly overlaying an emerging regional Eagle Ford shale play. Results from an initial appraisal of the Eagle Ford shale ranks it has high as any unconventional gas resource in North America with very high liquid content.
To date, Aurora has a significant land position around the acreage of 51,800 and a net position of 20,300—that is pre-farm out. The Upper Austin chalk reservoir has undergone comprehensive appraisal and development by ConocoPhillips in an adjacent acreage. ConocoPhillips operates and is the majority interest holder of the largest AMI Aurora participates in three AMIs—Sugarloaf, Longhorn and Ipanema—and Texas Crude Energy Inc. is a participant in all AMIs as well as an active operator of four.
In October 2009, Aurora advised that it had completed an independent certification of its interests in the Sugarkane Gas and Condensate Field in southern Texas.
Unique drilling techniques areraising the bar
Drilling is occurring outside of existing AMIs and a number of large industry players have acquired acreage positions along the Eagle Ford trend. In terms of design, a number of specialists from U.S.-based resource companies appraising the Eagle Ford Shale are utilizing a similar approach to their Haynesville developments.
ConocoPhillips has drilled 10 wells adjacent to Sugarloaf utilizing various completion techniques with reported IP rates ranging between 5.1 to 12.0 mmcfe/d. “Rather than simply an over-pressured Austin Chalk play, we now know it to be an over-pressured resource play that requires development via fracture stimulated horizontal wells,” Aurora technicians explain in a company document.
Acquiring significant capital for big plays
Aurora has managed its cash resources during the market downturn and has secured net cash of approximately $6 million. Strategic decisions were taken to ensure asset protection and conserve cash flow. In addition to a conservative fiscal approach, Aurora has temporary postponed any further field operations, particularly the planned operations on existing three Sugarloaf horizontal wells.
Meanwhile, Aurora has maintained and sought well-funded partners to carry a meaningful operational program across acreage, including funding obligations in Longhorn and Ipanema. Recently, Aurora has farmed out to Hilcorp, a major player in industry, which will fund a comprehensive work program as part of the project. After the farm out work program was completed across its acreage, Aurora obtained an interest in 10 horizontal wells within the Sugarkane field. The successful farm out facilitates continuous field appraisal and development opportunities across Aurora’s acreage.
What Aurora Oil & Gas Ltd., is set out to achieve in Sugarkane:
• Secure a material interest in a large play
• Remain funded in a market downturn
• Move up the learning curve, particularly drill and complete
• Watch others, leverage off their experience and balance sheets
• Big plays require significant capital—introduce a well-funded partner
• Validate the play within the industry
Aurora has recently undertaken sufficient activity to maximize value and validate the play within the investment community. Other projects include: Flour Bluff, a southern Texas gas field with Ryder Schott proven reserves of 31 Bcf and ongoing minor production, as well as its North Belridge project, a tight oil discovery with gross contingent resource of roughly 60m bbls in California.
Future outlook
Depending on the availability of rigs and equipment, frac development will likely start in November of this year. For the frac operations, shallow water wells are being drilled and holding pits will be dug at each location. The fracture design is based upon recent operations within the Eagle Ford trend, as well as taking into account the specific nature of the Sugarkane field. At Kowalik, an attempt will be made to pull the slotted liner. If successful, the rig will then run and cement a conventional liner before fraccing in similar fashion to the other wells. Otherwise acid stimulation will be attempted on this well.
Looking onto the future, planning is underway for the 2010 drilling program across the farming area with 10 wells scheduled. Aurora anticipates the first wells to be drilled will be within the Sugarloaf AMI. Continuous drilling activity will establish reserves and production meanwhile, maintain a hold on leased acreage and dramatically increased asset value.
With growing interest and drilling activity by unconventional resource companies in the Sugarkane field, Aurora has shown its appeal as a viable investment.
www.auroraoag.com.au
Aurora Oil & Gas Limited is an Australian Stock Exchange listed company focused on oil and gas exploration and production in North America that began operations in early 2005. The initial plan for the development of the company’s oil and gas interests is focused on the U.S. where large markets and existing infrastructure provides the opportunity for attractive economic returns.
Since the start of operations, Aurora has established a significant portfolio of U.S. oil and gas interests that includes exploration, development and production. Aurora anticipates a significant year in terms of value creation from drilling, testing, production and land acquisition.
Overview of projects
Sugarkane Gas and Condensate Field
Aurora has established a substantial landholding position within the Sugarkane Gas and Condensate Field Texas, providing the company with the opportunity to benefit from a multi trillion cubic feet equivalent (tcfe) gas and condensate resource. Most notably, Sugarkane Gas and Condensate Field has been referred to as, “a substantial Austin Chalk/Eagle Ford discovery.”
Discovered in 2006, the Sugarkane field is a unique reservoir that lies some 20 km south of the main Texas Austin Chalk trend and within the emerging Eagle Ford Shale play. Generally speaking, the Sugarkane field consists of a high quality Austin Chalk reservoir directly overlaying an emerging regional Eagle Ford shale play. Results from an initial appraisal of the Eagle Ford shale ranks it has high as any unconventional gas resource in North America with very high liquid content.
To date, Aurora has a significant land position around the acreage of 51,800 and a net position of 20,300—that is pre-farm out. The Upper Austin chalk reservoir has undergone comprehensive appraisal and development by ConocoPhillips in an adjacent acreage. ConocoPhillips operates and is the majority interest holder of the largest AMI Aurora participates in three AMIs—Sugarloaf, Longhorn and Ipanema—and Texas Crude Energy Inc. is a participant in all AMIs as well as an active operator of four.
In October 2009, Aurora advised that it had completed an independent certification of its interests in the Sugarkane Gas and Condensate Field in southern Texas.
Unique drilling techniques areraising the bar
Drilling is occurring outside of existing AMIs and a number of large industry players have acquired acreage positions along the Eagle Ford trend. In terms of design, a number of specialists from U.S.-based resource companies appraising the Eagle Ford Shale are utilizing a similar approach to their Haynesville developments.
ConocoPhillips has drilled 10 wells adjacent to Sugarloaf utilizing various completion techniques with reported IP rates ranging between 5.1 to 12.0 mmcfe/d. “Rather than simply an over-pressured Austin Chalk play, we now know it to be an over-pressured resource play that requires development via fracture stimulated horizontal wells,” Aurora technicians explain in a company document.
Acquiring significant capital for big plays
Aurora has managed its cash resources during the market downturn and has secured net cash of approximately $6 million. Strategic decisions were taken to ensure asset protection and conserve cash flow. In addition to a conservative fiscal approach, Aurora has temporary postponed any further field operations, particularly the planned operations on existing three Sugarloaf horizontal wells.
Meanwhile, Aurora has maintained and sought well-funded partners to carry a meaningful operational program across acreage, including funding obligations in Longhorn and Ipanema. Recently, Aurora has farmed out to Hilcorp, a major player in industry, which will fund a comprehensive work program as part of the project. After the farm out work program was completed across its acreage, Aurora obtained an interest in 10 horizontal wells within the Sugarkane field. The successful farm out facilitates continuous field appraisal and development opportunities across Aurora’s acreage.
What Aurora Oil & Gas Ltd., is set out to achieve in Sugarkane:
• Secure a material interest in a large play
• Remain funded in a market downturn
• Move up the learning curve, particularly drill and complete
• Watch others, leverage off their experience and balance sheets
• Big plays require significant capital—introduce a well-funded partner
• Validate the play within the industry
Aurora has recently undertaken sufficient activity to maximize value and validate the play within the investment community. Other projects include: Flour Bluff, a southern Texas gas field with Ryder Schott proven reserves of 31 Bcf and ongoing minor production, as well as its North Belridge project, a tight oil discovery with gross contingent resource of roughly 60m bbls in California.
Future outlook
Depending on the availability of rigs and equipment, frac development will likely start in November of this year. For the frac operations, shallow water wells are being drilled and holding pits will be dug at each location. The fracture design is based upon recent operations within the Eagle Ford trend, as well as taking into account the specific nature of the Sugarkane field. At Kowalik, an attempt will be made to pull the slotted liner. If successful, the rig will then run and cement a conventional liner before fraccing in similar fashion to the other wells. Otherwise acid stimulation will be attempted on this well.
Looking onto the future, planning is underway for the 2010 drilling program across the farming area with 10 wells scheduled. Aurora anticipates the first wells to be drilled will be within the Sugarloaf AMI. Continuous drilling activity will establish reserves and production meanwhile, maintain a hold on leased acreage and dramatically increased asset value.
With growing interest and drilling activity by unconventional resource companies in the Sugarkane field, Aurora has shown its appeal as a viable investment.
www.auroraoag.com.au
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