Brazil: Karoon to Drill Second Neon Control Well, after First Well Shows Encouraging Results

Tuesday, February 21, 2023

Australian oil and gas company Karoon Energy has elected to drill the second control well at the Neon discovery offshore Brazil, after the first control well, Neon-1, confirmed the presence of 25 meters of net oil-bearing pay.

Neon-1 and Neon-2 are both located within Karoon’s 100% owned S-M-1037 license, approximately 210 kilometers offshore Brazil in the southern Santos basin.

Back in April 2022, it said it would drill a control well and, subject to the results of that well, a second control well in the Neon oil discovery, offshore Brazil.

A few days ago, Karoon said that the first control well, Neon-1, spudded on January 23, had reached a final total depth of 2,382 meters measured depth (MD) on February 10, 2023, and that wireline logging of the target sections was underway.

Neon-1 was drilled into the down-dip southern flank of the Neon discovery, to better constrain lithologies and reservoir quality, and reduce the range of uncertainty on the oil-water contact, with the overall objective of better understanding the range of potentially recoverable volumes in Neon and assisting in delineating pathways for potential future production wells.

Although evaluation is ongoing, preliminary analysis of the logging-while-drilling (LWD) and wireline log data available to date, including preliminary inspection of whole core samples, confirms that the Palaeocene sandstone primary target zones are present and oil-bearing at this location, Karoon said.©Karoon Energy

The net pay thickness above the identified oil-water contact at this down-dip location is estimated at 25 meters MD. The deeper secondary target Maastrichtian sandstone section was confirmed to be water-bearing, consistent with pre-drill expectations, Karoon said.

Analysis of pressure tests through the Palaeocene section indicates that the oil in this section lies on the same pressure gradient as the oil at Echidna-1, suggesting that the two wells are likely in communication.

All reservoir quality estimates, including a preliminary analysis of net pay and the oil-water contact depth, will be subject to further studies and calibration from laboratory analyses of physical samples, including the 57 meters of core acquired from the well.


Based on these preliminary results from Neon-1, Karoon has decided to proceed with drilling Neon-2. 

The forward plan is to plug and abandon Neon-1 and mobilize the offshore drilling rig to the Neon-2 location. The Neon- 2 well will be drilled directionally to intersect a crestal location in the north of the Neon field.  The company is using the Noble Developer (ex-Maersk Developer) semi-submersible drilling rig for drilling off Brazil. The dayrate is $265,000 (including the mobilization fee).

The objectives of Neon-2 are to determine the quality and continuity of the Palaeocene units and to determine Palaeocene pressure connectivity with the two wells drilled to date. Additionally, it is planned that Neon-2 will test a deeper zone below the existing Palaeocene discovery, Karoon said.

The resource estimates for the Neon field (May 2018) are 1C, 2C and 3C contingent resources of 30 MMbbl, 55 MMbbl and 92 MMbbl.

"A revised resource assessment will take place once the results from both Neon control wells are known and, together with development engineering studies,will contribute to an updated integrated asset evaluation, which could potentially enable a decision to enter a Neon concept select phase," Karoon added.

Encouraging results

Karoon Chief Executive Officer and Managing Director, Dr Julian Fowles, said:"All the main objectives of the Neon-1 control well have been achieved. The preliminary results from the well, which confirm the presence of 25 meters of net oil-bearing pay at this down-dip, flank location, are encouraging and satisfy our minimum criteria to proceed with drilling Neon-2."

"The full logging suite currently being acquired will provide us with the data required to fully assess reservoir quality at this location. Once logging is complete, the rig will be mobilized to the Neon-2 well site, with the well expected to commence drilling before the end of February.”

Neon-1 and Neon-2 are both located within Karoon’s 100% owned S-M-1037 license, approximately 210 kilometers offshore Brazil in the southern Santos basin. Neon-1 is in 343 meters water depth and is 2.1 kilometers south of the Echidna-1 discovery well, while Neon-2 is planned to be located 1.3 kilometers NNE of Echidna-1, in 305 meters water depth. 

The Neon discovery is located 50‐60km north‐east of the company’s producing Baúna oil field at a water depth of approximately 300 meters,

Karoon has previously said that "if subsurface uncertainties can be sufficiently reduced, Neon provides Karoon with the potential for a standalone development or a tie‐back to our existing operations at Baúna."

Categories: Drilling Industry News Activity Production South America Discoveries Tiebacks Drilling Rigs

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