Elixir Petroleum (ASX: EXR) has been methodically proving up prospectivity of its aptly named 100% owned, 5,360 km2 Moselle Permit located onshore in northeastern France.
The Moselle permit is prospective for tight gas, gas shale and conventional oil and gas and represents a huge acreage position for with a working hydrocarbon system, with multiple play potential.
Preliminary work done to date indicates Elixir believes Moselle to be highly prospective for commercial hydrocarbon production from unconventional sources, particularly Carboniferous aged tight gas and shale formations.
Opportunities have been identified by Elixir to re-enter wells drilled on the Permit in the mid-1990’s. Providing an early opportunity for Elixir to test intervals of conventionally trapped hydrocarbons that may have been overlooked in past exploration activities.
Elixir will look to farmout the Moselle Permit and has retained an investment bank to assist in the process.
"The work completed to date leads us to believe that Moselle has the potential to host a significant hydrocarbon resource, and could over time deliver substantial value to the company and its shareholders," said Andrew Ross, managing director.
Elixir has decided to undertake further technical appraisal ahead of the release of more detailed initial findings and the commencement early in the second half of this year of marketing to industry of a farmout for a significant carried work program.
There are at least six sub-plays existing within the Moselle Permit. These are a combination of conventionally and unconventionally sourced hydrocarbon plays which Elixir will individually drill and test.
The work program has been aimed at acquiring, processing and interpreting available well, geological and seismic data located in, and adjacent to, the Permit.
Elixir has assembled a geological database which comprises:
- Detailed reports on over 100 wells located in, and adjacent to, the Permit;
- In excess of 455 kilometers of electric log data from 25 representative wells;
- Over 2,500 line kilometers of unprocessed, digital 2D seismic data;
- Over 530 line kilometers of fully reprocessed and reinterpreted 2D seismic;
- Ground based gravity data over an area of some 28,400 km2;
- Core and cuttings samples from over 2,800 meters of available core sourced from 6 key wells.
A forward work program will be determined from the studies.
The studies have however already identified opportunities. When finalized, the integration of the conclusions from these studies will shape the forward work program on the Permit.
Netherland Sewell & Associates Inc. (NSAI) consulting reserve auditing firm have been retained to provide an independent assessment of the in-place hydrocarbon resources within Moselle.
According to Ross, the indicative results from the preliminary NSAI work "have been very encouraging."
NSAI will then develop their resource estimate for the Moselle Permit. The independent resource report is expected to be finalized prior to the commencement of the farmout process.
Elixir has finalized a process for the selection of a leading global investment bank to provide assistance with a proposed farm out of the Moselle Permit.
Given the further technical work being undertaken by Elixir and the ongoing studies being conducted by the French Government, Elixir’s advice has been to delay the commencement of the marketing campaign for the farm out until early in the second half of 2011.
In early February 2011, the French Government announced its intention to undertake a study into the possible economic, social and environmental impacts of unconventional hydrocarbon resource exploitation within France. The study is similar in nature to a number of studies which are currently being undertaken in other parts of the world in response to the rapid growth of horizontal drilling and fracture stimulation activities associated with unconventional oil and gas exploitation.
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