Whitebark Energy data review sparks WA Warro gas field revival

Whitebark Energy’s Warro gas field in Western Australia was first drilled in 2009.

Whitebark Energy (ASX: WBE) says a fresh rethink at the company’s Warro gas field has flipped the script on historic water issues, revealing targeted solutions that could finally breathe new life into one of Western Australia’s best-located onshore gas assets.

When the Warro 3 well was first drilled in 2009, targeting a known gas-bearing reservoir called the Yarragadee Formation, it successfully flowed gas. However, the hole was also plagued by high water production, leading to the view that Warro was water-compromised and therefore difficult to develop economically.

Now, a new technical reinterpretation of the Warro 3 image log has suggested that historic water production was far more localised than previously thought. The company says the findings show that much of the reservoir is actually tight, intact and potentially gas-friendly, with water inflows linked to just one or two discrete fault zones at depth.

The difference is important and one that could change everything. Widespread fractures are very hard to control. However, if the water is coming from just one or two faults, it can often be blocked using modern well design and completion methods. In short, Warro may not be faulty according to Whitebark – it may have simply been misunderstood.

Image log specialist Dr Andrew Wilson from ImageStrat carried out the new analysis. He found that large parts of the Yarragadee Reservoir show little to no natural fracturing. Where fractures are present, most are closed and cemented, meaning they are unlikely to allow water flow unless opened during drilling or stimulation.

Notably, the study shows most of the water likely came from one or two faults near the bottom of the well, which matches older production logging data, shifting Warro from a complicated geological issue to a problem that can quite possibly be fixed with the right technical approach.

Adding a further layer of intrigue, the logs also suggest the reservoir may have been damaged by the actual drilling itself, caused by overbalanced drilling practices.

From a strategic standpoint, the reinterpretation appears to significantly de-risks the project. Whitebark now believes the gas resource remains largely intact and could be unlocked for commercial production with a targeted redevelopment strategy, using modern drilling techniques to focus on isolating water-prone zones.

“This new interpretation is critical in improving our understanding of the Warro reservoir and in identifying areas where sustainable rates of dry gas could potentially flow.” Whitebark Energy chief executive officer Nik Sykiotis

The timing of the study could hardly be better. Western Australia’s wholesale gas prices have more than doubled since 2020, increasing the need for new long-term gas supply to help ease pressure on the domestic market.

Originally drilled in 1977 by WAPET – a joint venture established in 1952 between Caltex and Ampol – the pair spent more than $100 million on seismic and drilling to define a major gas discovery, intersecting a huge 390-metre gas column. Flow tests later produced 1 to 2 million cubic feet of gas per day, despite limited stimulation and high water levels.

Although operations were suspended, the field was later estimated to contain a whopping 4.4 to 11.6 trillion cubic feet of gas, making it the largest onshore gas resource in Western Australia.

Sitting 200 kilometres north of Perth and just 30 kilometres from the Dampier-to-Bunbury pipeline, the project has a significant location advantage and a fast path to the state’s gas market if a new development program confirms these latest findings.

With the reinterpretation in hand, Whitebark says it has already moved to the next phase, launching a detailed engineering review to design an appropriate re-entry and testing program.

For a project once left for dead, Warro is suddenly back in play – and this time, the data appears to be firmly on Whitebark’s side.

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