Santos, Apache to Develop Halyard Gas Supplies

Santos and Apache Energy are to provide new gas supplies for the Western Australian domestic market by developing and producing gas from the Halyard field.

The two firms will complete and tie back the Halyard well in WA-13-L and add the Spar well.

The development is a new addition to the Western Australian supply portfolio, with gas from this area expected to supply around 10% of the state’s domestic gas needs from 2012.

For the development, Santos sold 55% of its working interest in Spar to Apache for an initial $31m. Additional payments of up to $85m will be made depending on the level of certified reserves in Spar following the drilling of the Spar 2 appraisal well later in 2010.

Santos will hold a 45% stake in Halyard and Spar, while Apache will own 55% and be the operator of both fields.

Halyard is expected to come onstream in mid-2011 and Spar will follow in late 2012.

Production from the combined development is expected to have an initial gross rate of 50TJ per day, which will increase to over 100TJ per day by early 2013 depending on the outcome of the Spar 2 well.

Santos estimates that Halyard and Spar have recoverable resources of about 335PJ gross, which will supply gas to Western Australia up to 2025.