Karoon reports that the Neon-1 (officially 9-NEO-1-SPS) control well reached a final total depth of 2,382 metres Measured Depth (MD) on 10 February 2023. Wireline logging of the target sections is presently 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 to better understand the range of potentially recoverable volumes in Neon and assist in delineating pathways of 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 atthis location.

The Palaeocene intervals, representing an extension of reservoirs tested at Echidna-1,were found to be present over a gross 113 metre MDinterval. Aprobable oil-water contact has been identified, which is within the range of pre-drill expectations and closely aligned with predictions based on seismic analyses. The net pay thickness above the identified oil-water contact at this down-dip location is estimated at 25 metres MD. The deeper secondary target Maastrichtian sandstone section was confirmed to be water-bearing, consistent with pre-drill expectations.

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 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 of the 57 metres of core acquired from the well.

Based on these preliminary results from Neon-1, Karoon has decided to proceed with drilling Neon-2 (officially 9-NEO-2D-SPS).

The forward plan is to plug and abandonNeon-1 and mobilise the rig to the Neon-2 location. Neon2 will be drilled directionally to intersect a crestal location in the north of the Neon field.

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.

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.

Chief Executive Officer and Managing Director, Dr Julian Fowles, commented: 
“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 metres 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 mobilised 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 kilometres offshore Brazil in the southern Santos basin. Neon-1 is in 343 metres water depth and is 2.1 kilometres south of the Echidna-1 discovery well, while Neon-2 is planned to be located 1.3 kilometres NNE of Echidna-1, in 305 metres water depth.

KeyFacts Energy: Karoon Gas Brazil country profile