While the flow rate has yet to be measured, the early-stage result is considered to be a significant development in Transerv’s strategy to establish Warro as a major economic gas project and a strong player in WA’s gas market.

Warro, located in WA’s mid-west, is Australia’s largest undeveloped onshore gas field with resources of 11.6 trillion cubic feet of gas in place. Transerv’s exploraon program at Warro is being funded by Alcoa of Australia, which can earn up to 65% of the project.

The gas flow followed the successful reservoir smulaon program completed at Warro-6 last week.

Reservoir smulaon at the Warro-5 well, which was drilled with Warro-6 as part of the current two-well program, was suspended when proppant from the inial smulaon phase back filled into the borehole.

The Warro 5 borehole has now been cleaned out and is ready for further reservoir smulaon work to complete the planned program.

Well Details

In both Warro 5 and 6 wells, the first smulaon stage was intenonally small to provide calibraon informaon for subsequent, larger stages.

At Warro-6, three stages of reservoir smulaon resulted in the successful emplacement of over 715,000 pounds (325,000kg) of proppant. Only the deeper 50% of the gross reservoir secon was targeted by these three stages. Inial flow back operaons commenced at Warro-6 on December 17 and resulted in the recovery of a substanal poron of the smulaon fluids.

A sustained gas flow, which was connuously flared, was also achieved as part of the inial well flow back program. As the gas rate was not metered, a flow rate could not be measured but the quanty is consistent with expectaons in this early stage of operaons.

WARRO DRILLING UPDATE – 21 DECEMBER 2015

At Warro-5, smulaon operaons are yet to be completed. Stage 1 (80,000 pounds or 36,000kg) was placed successfully and a second and final stage (approx. 280,000 pounds or 127,000kg) is yet to be carried out. Once done, Warro-5 will undergo clean-up flows.

Both wells will be completed with 2 3/8" producon tubing and set up for long-term tesng during Q1 and Q2 2016. This is now expected to commence for both Warro 5 and 6 wells by mid-January 2016. Transerv Managing Director Stephen Keenihan said the fracture smulaon work at Warro had achieved its objecves. In addion, it had shown that fracture smulaon can be reliably focused into the zones of interest and the reservoir secons displayed lower fracture gradients than expected.

"These findings are important for future wells because the smulaon costs can be reduced and the gas-bearing zones of interest can be targeted precisely," Mr Keenihan said.

"These two wells have already doubled the Warro Conngent Resource (see ASX release dated November 19, 2015), and the early flow of gas at Warro-6 provides further evidence that this major gas resource could be an aCracve economic undertaking" Mr Keenihan said.