Rodinia Oil Corp., Calgary, has reported its financial and operating results for the second quarter of 2011.
Second Quarter 2011 Highlights
- On June 9, 2011, Rodinia announced that it had spudded its first exploratory well, Mulyawara 1, located in the northwest corner of PEL 253 in the Officer Basin, South Australia. Mulyawara 1 is drilling vertically to an estimated total drilling depth of 2,700 metres to test five prospective reservoir horizons: Murnaroo, Tarlina, Mundallio, Emeroo and the deepest of which is the Aeolian Pindyin sandstone (also called the sub-salt unit). Rodinia has an 80% working interest in this well and prospect, and is the operator.
- On June 9, 2011, Rodinia announced its second drilling location, Kutjara 1, which has recently been hi-graded and re-confirmed by additional 2D seismic lines. Kutjara 1 is located in the west-central portion of PEL 253 approximately 35 kilometers southeast of Mulyawara 1.
- Total capital expenditures of $23.9 million for the six months ending June 30, 2011 were incurred in South Australia associated with Rodinia's Phase III seismic acquisition and interpretation program and drilling preparation and drilling expenses.
- As at June 30, 2011 Rodinia had completed and processed 2,536 kilometers of 2D seismic in PEL 81 and PEL 253 as part of the 2011 capital budgeted Phase III seismic program.
2011 Capital Program Update
As of June 30, 2011, Rodinia had a working capital surplus of $29.7 million with no debt. Rodinia is in the exploration stage of its development in the remote and under-explored Officer Basin in Australia. Its ability to finance its future operations is dependent upon the existence of economically recoverable hydrocarbons and its ability to obtain new sources of financing.
Given numerous mechanical and operational issues with the drilling of Mulyawara 1, drilling progress has been substantially slower than anticipated, resulting in cost overruns.
In light of lessons learned from this first exploratory well, Rodinia is in the process of reviewing and revising the existing drilling program and well designs for the remainder of the 2011 capital program.
On August 4, 2011, Rodinia announced that testing to date of Mulyawara 1 had confirmed the existence of excellent reservoir quality rocks in the Neoproterozoic with the Eidacaran Age Murnaroo Formation having an average log porosity of 18% (commonly up to 23%). The well encountered small gas peaks and traces of hydrocarbon fluorescence exhibiting blooming cut over discrete intervals within the undifferentiated Upper Cryogenian.
Rodinia believes these findings are encouraging and they reduce the risks associated with source, migration and reservoir. However, Mulyawara 1 is still a high-risk venture and yet to be proven and the primary objectives of the well are yet to be intersected and lie below the prospective regional salt seals.
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