Transerv Energy has reported that the Warro-4 well at the onshore Warro gas field, located 200km north of Perth in the Perth Basin, commenced drilling operations on April 11.

The well is expected to take 30 - 35 days to drill to an estimated total depth of 4,150m. Reservoir stimulation equipment is due to arrive on site in June to complete two slick water fracs which will be followed by a flow- testing program that is planned to run for three to six months.

Warro-4 will target the gas bearing reservoir sands of the Lower Yarragadee which produced gas in the Warro-3 well. Warro-3 was drilled and tested in 2009 and produced gas at rates of over 5mmcfd and confirmed the reservoir model and presence of gas reserves in the field.

Warro-4 is being funded by aluminium giant Alcoa, which is earning a 65% stake in the Warro field in return for spending up to $100 million on appraisal and development activities. Transerv will retain a 35 per cent stake and is operator of the project.

The Warro field was discovered by WA Petroleum (WAPET) in 1977, with independent experts, Gaffney Cline, estimating it contains a P50 recoverable resource of 1.1Tcf (trillion cubic feet). Gas in place is estimated at 8-10 Tcf. The field was not considered commercial when discovered due to the low flow rates caused by the tight nature of the reservoir rocks. But, the latest reservoir stimulation technology, which has been used successfully in the US to release so-called tight-gas from major fields that would otherwise be uncommercial, is expect to have a similar impact on the Warro field.

The economic attraction of the Warro field is further boosted by soaring domestic gas prices in WA. Alcoa, which operates major alumina refineries in WA, is one of the State’s biggest gas users. Alcoa recently funded the Warro 3D seismic survey, which is now being processed and will play a key role in planning the Warro 5, 6 and 7 and future well locations. Transerv is in discussions with contractors concerning a rig to drill these wells.

Alcoa has the right to its pro-rata share of any gas produced at Warro. Importantly, Transerv also has the same right to market separately its 35 per cent share of gas production. The field is only 31 km from both the Dampierto-Bunbury and Parmelia pipelines, which provide easy access to gas consumers both north and south of the field.