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Byron Energy Limited: SM 6 2 well update

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Oilfield Technology,

Byron Energy Limited (Byron) (ASX:BYE) announced on 18 March 2016, that the drill pipe in the Byron Energy SM 6 #2 (SM 6 #2) well became stuck at a depth of 8039 ft (2451 m) measured depth (7860 ft/ 2396 m true vertical depth), approximately 400 ft above the primary target reservoir, the G 20 Sand.

Attempts were made over to free the stuck drill pipe however these attempts have thus far proved unsuccessful. Byron has begun side track operations at a depth of 7949 MD ft (2423 m) measured depth (7780 ft /2372 m) true vertical depth) after a successful back off of the drill-pipe.

Byron will attempt to drill the side-track wellbore, with a conventional 8 ½ in. diameter hole as originally planned, along a path parallel to the originally planned wellbore to a total measured depth of 9516 ft (2900 m) (9138 ft /2785 m true vertical depth).

On the 20 March 2016, Byron prepared to trip in the hole to set a cement kick off plug at a depth of 7949 MD ft (2423 m) measured depth (7780 ftnb/2372 m) true vertical depth). Drilling operations should resume later in the week commencing the 21st of March after required BOP test which will be performed as the cement cures.

The SM6 #2 well is the first well to be drilled as part of Byron’s farm-out to Otto Energy Limited (Otto), announced on 11 December 2015. In order to earn a 50% working interest (equal to a 40.625% net revenue interest) in SM 6, Otto will contribute 66.67% of the total estimated costs of the SM 6 #2 well of $US8.0 million ($US5.3 million Otto and $US2.7 million Byron). Any costs above $US8.0 million in respect of the SM 6 #2 well and all future expenditure in SM 6 will be in accordance with Byron’s and Otto’s respective working interest (Byron 50%/Otto 50%). 2SM 6 #2 is being drilled in water depth of approximately 65 ft (20 m).

The well is being drilled on a prospect in the south west corner of a major salt dome in SM 6, located offshore Louisiana, 216 km southwest of New Orleans, Louisiana, USA.

Byron, through its wholly owned subsidiary Byron Energy Inc. (the operator), currently holds a 100% working interest and an 81.25% net revenue interest in SM 6. If Otto earns an interest in the SM 6 block, Byron’s working and net revenue interests will be reduced by 50% at the earn-in point, to 50% and 40.625% respectively.

Adapted from a press release by Louise Mulhall

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