BLACK BASS-1 DRILLING REPORTS
April 25, 2005
TORONTO -- InterOil Corporation (TSX:IOL) (AMEX:IOC) (ASX/POMSoX:IOC), a Canadian company with operations inPapua New Guinea, announced today that it had commenced drilling of its first exploration well on the Black Bass Prospect located within Petroleum Prospecting License 236. InterOil expects this well to reach target depth within 45 days. The target is a reef limestone which has been identified by a seismic survey and is estimated to be approximately 3,937 feet (1,200 meters) deep.
Drilling Report No. 1 May 9, 2005
Black Bass Prospect
Type: Oil / Gas Exploration well
Location: PPL 236, Eastern Papuan Basin
-8 degrees 30' 2"S / 146 degrees 5' 15"E
Current Status: Set 9-5/8" casing and cemented. Installed and
tested BOP. Drilled out of cement.
Currently drilling ahead at 1,509 feet (460
meters) at 17:00 hours PNG time.
Drilling Report No. 2 May 24, 2005
Black Bass Prospect
Type: Oil / Gas Exploration well
Location: PPL 236, Eastern Papuan Basin
-8 degrees 30' 2''S / 146 degrees 5' 15''E
Current Status: Past data: Set 20" conductor at 33 feet (10
meters), Set 13-3/8" surface at 119 feet (36
meters), Set 9-5/8" intermediate casing at
1,178 feet (357 meters).
Drilled to 3,100 feet (945 meters), background
gas at 0.15%, with gas peaks of 4.6%(1).
Logged the well to correlate drilling results
at this depth with seismic. Set & cemented 7"
intermediate casing string to 3,100 feet (945
meters). Pressure tested BOP. Drilled out to
3,107 feet (947 meters).
Current operations drilling ahead with 6 1/4"
drill bit @ 3,107 feet (947 meters) to the
target objective.
Drilling Report No.3 June 7, 2005
Black Bass Prospect
Type: Oil / Gas exploration well
Location: PPL 236, Eastern Papuan Basin
-8degrees 30' 7.4"S / 146degrees 23' 12.53"E
Current Status: Past data: Set 20" conductor at 33 feet (10
meters), Set 13-3/8" surface at 119 feet (36
meters), Set 9-5/8" intermediate casing at
1,178 feet (357 meters). Set 7" intermediate
casing at 3,100 feet (945 meters).
Current operations - drilling ahead with 61/4"
drill bit at 4,596 feet (1,401 meters) to the
lower target objectives. Drilling of the upper
seismic target penetrated a sandstone
formation in lieu of a limestone reef.
Currently drilling the secondary seismic
target with plans to run wireline logs to
evaluate the penetrated objectives upon
reaching total depth.
Planned Total Depth: Approximately 5,740 feet (1,750 meters) deep.
Drilling Report No. 4 June 21, 2005
Black Bass Prospect
Type: Oil / Gas exploration well
Location: PPL 236, Eastern Papuan Basin
-8degrees 30' 7.4''S / 146degrees 23' 12.53''E
Current Status: Past data: Set 20" conductor at 33 feet
(10 meters), Set 13-3/8" surface at 119 feet
(36 meters), Set 9-5/8" intermediate casing
at 1,178 feet (357 meters). Set 7"
intermediate casing at 3,100 feet (945 meters).
Drilled to 5,660 feet (1,721 meters) with a
6 1/4" drill bit. Currently conditioning
the well and logging well to establish a
test program for the well.
Several gas shows were encountered during
drilling from 3,140 feet (957 meters) to
current depth at 5,660 feet, (1,721 meters)
which warrant further testing. At 4,908
feet (1,496 meters) gas increased above
background levels to reach a 12% mud cut
with methane (C1), ethane (C2), propane (C3)
and butane (C4). A second gas show at 5,016
feet (1,529 meters) peaked to a 29% mud cut.
At 5,249 feet (1,600 meters) the well
encountered a glauconitic sandstone unit
which produced a 29% mud cut, and caused
the well to flow at surface. The well was shut
in, where gas and gas cut mud was circulated
through the choke and flared. The mud weight
was increased from 11.1 lbs/gal. to 14.4
lbs/gal. to control the gas and stabilize the
hole. The well is under control and stabilized
with heavier 14.4lbs/gal. drilling mud.
Connection gas peaked at approximately 40%,
with C1 to C4 recorded. The shows contained
richer (heavier hydrocarbons) gas with depth.
Contingent on the results of electric logs in
progress, and a stable hole condition,
additional objectives remain to be drilled.
Testing of the well is warranted and testing
equipment is currently being mobilized to
the rig site.
Drilling Report No.5 July 6, 2005
TORONTO -- InterOil Corporation (TSX:IOL) (AMEX:IOC) (ASX/POMSoX:IOC):
Location: PPL 236, Eastern Papuan Basin -8 degrees 30' 7.4"S / 146 degrees 23' 12.53"E
Past data: Set 20" conductor at 33 feet (10 meters), Set 13-3/8" surface casing at 119 feet (36 meters), Set 9-5/8" intermediate casing at 1,178 feet (357 meters). Set 7" intermediate casing at 3,100 feet (945 meters). Drilled to 5,953 feet (1,789 meters) with a 6-1/4" drill bit.
Current Status: Currently in the process of the testing program for Black Bass, which includes the running of Drill Stem Tests - "DST" for the well. This follows the mobilization of testing equipment to location and the completion of electric logs. Several gas shows were encountered during drilling from 3,140 feet (957 meters) to current depth which in conjunction with the electric logs warrants DST's across three zones to test for gas. Testing is expected to be complete within a week. (note: previous wells drilled in the area have experienced background gas, however background gas in no way confirms commercial accumulations of hydrocarbons reached to date on this well. The structure is logged and now must be tested and would need further geological, geophysical and appraisal work before a commercial confirmation of gas reserves.)
Drilling Report No. 6 July 18, 2005
Black Bass Prospect
The Black Bass - 1 is the first onshore well in the Eastern most portion of the Papuan Basin to be drilled since the late 1960's and is located in Petroleum Prospecting License ("PPL"
236 in Papua New Guinea. This well was programmed to test as its primary objective a seismic anomaly and the reservoir potential of the Wedge Hill Limestone and the Talama Formation.
The well data confirmed the anomaly encountered at 3,287 feet (1,002 meters) results from a sandstone and shale sequence consistent with a fluvial system. Confirmation of reservoir quality sandstones with liquid-rich natural gas in a more regional play has opened a larger exploration opportunity along the coast. The company is encouraged by the reservoir and hydrocarbons discovered at Black Bass and intends to acquire new seismic data surrounding the well. Drill-stem testing proved inconclusive despite very encouraging gas flows during drilling. The well will be plugged and abandoned pending further seismic and geological work being done. It is anticipated that additional wells will need to be drilled to confirm the structural highs and regional extent of the reservoirs discovered.
The well was drilled to 5,953 feet (1,789 meters) with a 6-1/4" drill bit with several gas shows encountered during drilling from 3,140 feet (957 meters) to 5,660 feet (1,721 meters) which warranted further testing. At 4,908 feet (1,496 meters) the gas increased above background levels to reach a 12% mud cut with methane (C1), ethane (C2), propane (C3) and butane (C4). A second gas show at 5,016 feet (1,529 meters) peaked to a 29% mud cut. At 5,249 feet (1,600 meters) the well encountered a glauconitic sandstone unit with flow to the surface. The well was shut in and the gas was flared, establishing a discovery in the Eastern Papuan Basin. The mud weight was increased to control the gas and the hole was stabilized.
These positive indications during the drilling phase warranted testing of the well and equipment was then mobilized to the rig site. Partial testing of the well with drill stem tests ("DST's" and wireline logs have revealed the following results:
- Although well off the structural high, the Black Bass -1 well penetrated the Wedge Hill Limestone and logs indicated it has significant reservoir potential with log derived porosity of 15% to 18% and a gross thickness of approximately 587 feet (179 meters). The limestone formation covers a large portion of the coastal exploration licence resulting in a number of future drilling opportunities.
- Analysis of the Talama Volcanic Formation has revealed a lower porosity section with several large fracture/fault intervals with unconsolidated sands. Detailed review of the wireline logs strongly suggested that the permeability in this interval is related to fracturing and the unconsolidated zones.
- DST's were conducted over two zones: 3,100 - 5,150 feet (945 - 1,570 meters) and 5,226 - 5,383 feet (1,593 - 1,641 meters).
- Within the upper zone minimal flow of mud returns was observed during the DST, following the introduction of high mud weights to the formation.
- The DST in the deeper zone flowed formation water with gas (90% C1) cut, confirming elevated gas saturation levels in the Talama Formation. The test was terminated due to collapse of formation solids (sand, silt and gravel) into the test string. The flow was closely correlated to a fracture identified on the wireline logs.
Several features at the structural high near the Black Bass-1 well will be delineated with a seismic program to define locations for offset wells at Black Bass and should be completed while drilling is in progress in PPL237 and PPL238. The rig on Black Bass will be moved to the Triceratops well site for drilling.
Second Quarter 2005 Drilling Activities
• We spudded the first exploration well, the Black Bass – 1, of our 8-well drilling program on
April 26, 2005.
• As its primary objective, this well was programmed to test a seismic anomaly, the reservoir
potential of the Wedge Hill Limestone and the Talama Formation.
• Drilling the well has confirmed that the anomaly encountered at 3,287 feet is from a
sandstone and shale sequence consistent with a fluvial system.
• Confirmation of reservoir quality sandstones and limestones was achieved, with liquid-rich
natural gas in the sandstone sections, which was flared at surface during drilling.
• The Black Bass – 1 well has been plugged and abandoned. Further seismic and geological
work will be necessary to determine a path forward.
• Subject to seismic and geological work, additional wells will need to be drilled to confirm
the structural highs and regional extent of the reservoirs discovered.
• The results of the Black Bass – 1 have confirmed a regional play and a larger exploration
opportunity along the coast for the limestone and sandstone systems, and that the oil system
is positively charged with hydrocarbons.
