Bongo Prospect
The Bongo Prospect is located onshore in the upper Texas Gulf Coast in Wharton County, approximately 90km west-south-west of Houston. Caza Oil and Gas Inc (Caza) and its subsidiaries are the majority owners and operators of the Bongo project. Caza has a significant portfolio of projects in Texas and Louisiana and is regarded as a competent operator. Verus has a 9.375 per cent working interest (WI) in Bongo.Drilling of the OB Ranch # 1 (Bongo #1) well commenced in the later part of July 2010 and reached a total depth of 16,280ft in August 2010. The drilling intersected hydrocarbon-bearing sands with potentially significant gas and condensate between 12,400’ and 12,900’ depth.
Fracture stimulation, or “fraccing” of the OB Ranch #1 well began in mid-November and the well was then flow tested. It was placed on production on 13 December, and initial production rates on a 10/64ths choke were 2.65 million cubic feet of gas and 311 barrels of oil per day.
Artificial lift was installed on B#1 to enhance production, help stabilise flow rates and allow a better understanding of the reservoir characteristics, including deliverability. Bongo #1, as at the end of February, had produced more than 13,700bbls oil, 135,000mcf gas and almost 10,000bbls water. Caza continues to work with the well to establish a consistent flow rate, and it may require more remedial procedures.
The OB Ranch #2 well (Bongo #2) is a direct offset to the Bongo #1 discovery well, targeting the Eocene, Cook Mountain interval. It spudded on 17 May 2011 and the rig reached target depth of 13,210 feet in early July.
Bongo #2 was successfully perforated and fracture stimulated over three intervals in the Cook Mountain Formation during July. The well was flowed back in order to clean up frac fluids and then placed on extended well tests. During the clean-up phase, the well unexpectedly commenced producing significant amounts of water. Setting a permanent bridge plug above the Middle Cook mountain perforations was successfully performed and the water production was reduced by 50% with no reduction in oil and gas production.
The combination of recent production data, whole core analysis, well logs and seismic data indicate that the Cook Mountain formation is complex in nature with sands intermittently present at different intervals throughout the formation. Both wells are commercial, however, production data from the OBongo #1 and #2 wells seems to indicate that the reservoir is more limited in nature than can be seen on seismic data alone. This data, when coupled with the fresh formation water production at Bongo #2, has increased the commercial and technical risk of the project. The shallower Frio and Yegua formations remain untested and behind pipe at approximately 5,530 feet and 9,000 feet respectively.
The Yegua and Frio formations are undergoing review and further analysis to determine the potential for additional drilling locations on the Bongo Prospect to optimise potential production.
Bongo #2 is the first proposed well in a potential five to eight-well development program. Shallower Yegua sands, also seen in the first well, will be targeted in any subsequent development wells.
Verus’ share of Bongo #2 drilling costs have been substantially funded by production proceeds from the Bongo #1 well.