Can H3 Energy’s New Well Design Unlock Commercial Gas Flow at Warro?

Updated Interpretation Sheds New Light on Warro 3

H3 Energy Limited has announced a significant update to its understanding of the Warro 3 well, part of the larger Warro gas field in Western Australia. Through a detailed reinterpretation of image logs by Dr Andrew Wilson of ImageStrat Pty Ltd, the company has identified 11 distinct dry gas-bearing zones ranging from approximately 9 to 25 metres thick. This fresh analysis builds on previous work by Dr Steve Adams and offers a more nuanced view of the reservoir’s structure and potential.

The new stratigraphic correlation, incorporating chemostratigraphy and biostratigraphy data, challenges earlier reservoir models that may have miscorrelated key zones. Notably, the study highlights large, continuous sand bodies that are likely to extend over several kilometres, suggesting a robust and laterally extensive gas reservoir. These sands exhibit zones of higher natural permeability, which could be critical for achieving commercial gas flow rates.

Strategic Implications for Appraisal and Development

Armed with these insights, H3 Energy is preparing to design a new horizontal appraisal well that leverages existing vertical wellbores. This approach aims to better delineate the productive gas zones and connect the dry gas intervals more effectively. CEO Nik Sykiotis emphasised the strategic advantage of re-entering and deviating from existing wells, describing it as a "very low-cost way to test our hypothesis" and a logical next step toward commercialisation.

The Warro gas field itself holds a prime location just 30 kilometres from the Dampier-to-Bunbury Natural Gas Pipeline, a critical artery for Western Australia’s domestic gas supply. Previous operators invested over $100 million in seismic and drilling activities, confirming a substantial gas resource with test flows of 1–2 million standard cubic feet per day despite limited stimulation. With renewed regulatory support for fracture stimulation and modern completion strategies, H3 Energy is well positioned to unlock this resource’s value.

Technical Expertise and Next Steps

The reinterpretation was led by Dr Wilson, a specialist in borehole image log analysis with extensive experience in the Perth Basin. His work has provided critical data on reservoir connectivity, sealing intervals, and fracture presence, all essential for designing effective appraisal drilling. The identification of three key sealing intervals and a large fault zone explains the coexistence of water-bearing and dry gas zones within the reservoir.

Looking ahead, H3 Energy plans to announce the final design of the horizontal well once completed. This will mark a pivotal moment in the company’s journey to transform Warro from a legacy asset into a producing, high-value gas field. The market will be watching closely as the company moves from interpretation to on-ground appraisal activities.