Hartshead ResourcesASX:HHR Stock Report

Hartshead Resources Nl Announces Uk Southern Gas Basin Phase I Concept Select ­ Operational & Uk Gas Market Update

Hartshead Resources NL announced an update regarding the 2,171 Bcf Phase I Concept Select work program covering the development of the Victoria & Viking Wx fields in the UK Southern Gas Basin and an update on the UK gas market. The geophysical re-mapping of the Victoria and Viking Wx gas fields, based on the interpretation of existing 3D seismic datasets, has now been completed by Xodus Group (Xodus). Building of geo-cellular static field models of each field has commenced, which combines the new mapping with the recently updated petrophysical well log interpretations. This, in turn will be used to construct full field dynamic reservoir simulation models, which will then be history matched to the historic gas production from the fields. The reservoir simulation models will be used to generate production profiles and updated resource outputs for the Concept Select, third party infrastructure hosts and engineers for the optimisation of production well frac design. Fenix Consulting Delft (Fenix) have completed an analysis of three historically fracced production wells in the Victoria and Viking Wx fields. The analysis has provided information on the fracture characteristics, such as near wellbore permeabilities, fracture dimensions and proppant concentrations achieved during the previous operations. The results from this review will be used to assist in the design and optimisation of new fracs in planned future development wells on the Phase I fields. A review of the potential development well trajectories for the Victoria and Viking Wx fields from a single or multiple well centres has been completed by Fraser Well Management (FWM). FWM are now developing well designs and costings for drilling from single and dual well centres which are capable of reaching the furthest extents of the Victoria and Viking Wx fields, whilst simultaneously allowing optimal levels of well fracturing to be achieved. The Greenfield Concept Select study is underway as part of the Petrofac contract and is interfacing with subsurface, well and frac engineering and HSEQ. Petrofac have completed CAPEX estimations for various elements of the possible development concepts and are underway with OPEX estimations. Support is also being provided to progress tie-in and offtake options with third party infrastructure hosts. Discussions are underway with a number of potential third party infrastructure hosts where possible export routes for gas from the Victoria and Viking Wx fields have been identified. A series of workshops are planned in the near future with the potential host operators to commence feasibility studies for the tie-in of Hartshead's facilities and gas offtake. The feasibility studies will commence once Hartshead Terms of Reference (TOR) for the tie-ins have been established and will be evaluated prior to entering an indicative commercial agreement.