Australian Projects
Canning Basin, Western Australia
Emerald Interest 12.75% to 100%
EP- 104 Project:
Emerald had an agreement with a consortium headed by operator Empire Oil and Gas NL (through its wholly owned subsidiary, Gulliver Productions Pty Ltd) to farm-in for an 18.75% working interest (25% paying interest) into three permits in the Canning Basin, Western Australia, being EP104 (R4), Retention Lease R1 and L-98-1 Application. Emerald subsequently farmed down 6% of its interest to ARC Energy in return for ARC paying 12% of Emerald's costs.
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Valentine 1 Well
Valentine 1 is located approximately 20 kilometres north of the township of Derby in northwest Western Australia's Kimberley region. The primary reservoir objective was the Late Devonian-aged Virgin Hills Formation.
ARC Energy drilled Valentine 1 vertical well to a total depth of 3,430 metres in September - October 2007.
The well intercepted very strong gas shows and indications of porosity in the Anderson and Laurel Formations down-dip from the target interval in the Stokes Bay #1 well. This is an extremely positive indication for Stokes Bay #1 which was targeted to intersect these objectives within closure, some 90 meters up-dip from the Valentine #1 intersection.
Figure 3: The Century 18 rig on location at the EP104/R1 project in the Canning Basin of Western Australia during drilling of the Valentine 1 and Stokes Bay 1 wells.
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EP 104/R1 STOKES BAY 1 WELL
The Stokes Bay 1 well was drilled as a sidetrack from the Valentine 1 wellbore after the completion of drilling operations at Valentine 1. Stokes Bay 1 was a test of the extent and reservoir development of the gas accumulation intersected by the Point Torment 1 well drilled in 1992. It was drilled as a deviated well with a final total depth of 2,777 metres below 7 inch casing.
The revised total depth was to test the gas potential of the Nullara reefal carbonates following gas shows in Valentine-1 well. Pressure gradient studies indicate that the Nullara reefal carbonates could be hydrocarbon-bearing. So far no actual indigenous formation fluid has been recovered, only drilling fluids which invaded the formation while drilling.
Project Status: As previously announced the operator has suspended swabbing operations until the end of the wet season, anticipated to be Q3 2008 at the earliest.
West Kora Workover
By completing the Stokes Bay 1 farm-in, Emerald will have an option to participate in the West Kora work over on the same interests as for Stokes Bay (paying 25% for an 18.75% working interest). This well is situated on Application L98-1. West Kora flowed 300 barrels of high quality oil on a previous test and the well was re-entered and 23,000 barrels of oil were produced and sold. It is estimated that a successful completion could result in ultimate recoveries of 100,000+ barrels of oil.
EPA 4/05-6, Canning Basin, WA
(Emerald 100% Working Interest and Operator)
Emerald's application EPA 4/05-6 lies immediately to the west of the EP104 permits and covers the west extension of the Pinnacle Fault, the location of much of the previous production in the Canning Basin. This permit application is currently proceeding through the Native Title process. The permit area contains several structural "look-alikes" to the Stokes Bay Prospect (in EP-104) along the Pinnacle Fault Zone. A discovery at Stokes Bay would add considerably to the exploration potential of this permit which will be held 100% by Emerald (subject to Native Title).
Emerald's mapping of leads and prospects on EPA 4/05-6 both along and near the Pinnacle Fault has identified several large structures that may host significant accumulations of hydrocarbons, some several times larger than the Stokes Bay prospect, as shown in Figure 2 below.
In view of the successful discovery of porous, permeable "reefal" reservoir rocks in the Stokes Bay 1 well, Emerald believes there is significant potential to discover several similar prospects on this large acreage block covering the western extension of the Pinnacle Fault.
Project Status: Native Title negotiations are proceeding.
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EP L07-6 & T07-1 (Lacapede Islands) Offshore Canning Basin, WA
(Emerald 100% Working Interest and Operator)
Emerald was recently notified by the WA Department of Industry and Resources (DoIR) that it has been named preferred applicant for exploration permits L07-6 and T07-1 over the Lacapede Islands, offshore Canning Basin WA. Emerald has accepted the new permits and will now commence Native Title negotiations with the Claimants. The award of these tenements further consolidates Emeralds strategic holdings along the structurally significant Pinnacle Fault zone (PFZ) and its projection offshore. The Pinnacle Fault is a key structural element between the Fitzroy Sub-Basin and the Lennard Shelf. It is believed to be the conduit for oil and gas migration from the Fitzroy Sub-Basin into structural and stratigraphical traps on the adjacent Lennard Shelf to the north.
In view of the successful discovery of Devonian "reefal" reservoir rocks in the Stokes Bay 1 well at EP104/R1, which is to be further tested in Q3 2008, Emerald believes there is significant potential to discover several similar prospects along the western extension of the Pinnacle Fault (map above).
Project status: Awaiting permit award
Application for W07-12
(Emerald 100% Working Interest and Operator)
On April 16, 2008 Emerald made Application for Federal release area W07-12, offshore Canning Basin. The company is awaiting notification from the Western Australian Government whether or not it has been successful.
Emeralds current tenement holdings in the Canning Basin are summarized below.
| Exploration Permit/Retention License/Applications | Emerald Net Working Interest | Permit Size (approx sq km) |
| EP 104 (R5) | 12.75% | 700 |
| Retention Lease R1 | 12.75% | 290 |
| Application L98-1 (option) | 12.75% | 200 |
| Application EP 4/05-6 | 100% | 2.600 |
| Application L07-6 | 100% | 200 |
| Application T07-1 | 100% | 400 |
| Application W07-12 (Pending) | 100% | 8,000 |
| Total Holdings (gross) | 12,390 |