US-focused Kilgore Oil and Gas has entered into an agreement to acquire a 51% interest in three permits in the highly prospective Clarence Moreton Basin, New South Wales. The company will gain the interest by acquiring 51% of the issued capital of ...

 

In the Clarence-Moreton Basin, PEL 432 was cancelled on 12/03/2010  ...


Industry Summary

Company News

US-focused Kilgore Oil and Gas has entered into an agreement to acquire a 51% interest in three permits in the highly prospective Clarence Moreton Basin, New South Wales. The company will gain the interest by acquiring 51% of the issued capital of Clarence Moreton Resources which holds the conventional and coal seam gas rights of PEL 457, 478 and 479. Under the agreement, Kilgore will issue 175 million fully paid shares together with 175 million Kilgore options exercisable at 5c on or before June 31 2012 to gain a 51% interest. Once the transaction is complete, Clarence Moreton Resources will become a majority owned subsidiary of Kilgore. Kilgore has also secured an option to acquire the remaining 49% of Clarence Moreton Resources through the issue of additional shares and options, and the payment of an annual royalty on gross sales arising from the project. (Source: www.petroleumnews.net, 19/03/2010).

Shell Energy Holdings Australia Ltd, a subsidiary of Royal Dutch Shell plc, and PetroChina International Investment Company Ltd, a subsidiary of PetroChina Company Limited, welcome the announcement by the Board of Arrow Energy Limited to unanimously recommend its shareholders vote in favour of the joint proposal to acquire 100% of Arrow shares. CS CSG (Australia) Pty Ltd, the 50/50 joint venture company owned by Shell and a subsidiary of PetroChina, has entered into an agreement with Arrow for the proposed acquisition under which it has agreed to pay A$4.70 cash per share for all of the shares in Arrow, representing a total consideration of A$3.5 billion. This allows Arrow shareholders to crystallise the value of the Queensland Coal Seam Gas (CSG) assets and realise a significant premium for their shares. The offer is subject to customary conditions including regulatory approvals and Arrow shareholder approval. On successful completion of the acquisition, the joint venture would own Arrow’s Queensland CSG assets and domestic power business as well as Shell’s Queensland CSG assets and its site for a proposed liquefied natural gas (LNG) plant on Curtis Island at Gladstone. (Source: Shell & PetroChina Media release, 22/03/2010).

Todd Energy has awarded a $US2.71 million ($A2.96 million) contract to Singapore’s Reflect Geophysical to carry out a 3D seismic survey over the Matariki area in PEP 51313, New Zealand. Reflect Geophysical, a subsidiary of Otto Marine, will start the survey next month using the Reflect Resolution vessel. The survey will cover 200 square kilometres of the Matariki area which lies south and west of the Maari oil field. Partner in PEP 51313, Cue Energy Resources, believes the Matariki structural trap has original oil in place of 366 million barrels with mean estimates of 115MMbbl for oil and 38 billion cubic feet of gas. (Source: www.petroleumnews.net, 24/03/2010).

Royal Dutch Shell PLC, after announcing plans to trim its refining and marketing operations, has reported an agreement to sell its downstream businesses in New Zealand. Shell will sell its 17.1% interest in the 104,000-b/d refinery at Marsden Point and its network of more than 220 retail outlets to Aotea Energy Ltd, a consortium of Infratil Ltd and the Guardians of New Zealand Superannuation. The consortium will manage the interest through its operating company, Greenstone Energy Ltd. Shell is to receive a cash payment of $696.5 million (NZ) with a working capital adjustment. Earlier this month, Shell executives disclosed plans to cut worldwide refining capacity by 15% and retail operations by 35%. Marsden Point, owned by New Zealand Refining Co., is the country’s only refinery. Other major shareholders in New Zealand Refining are BP PLC, Chevron Corp, ExxonMobil Corp and Emerald Capital. (Source: Oil & Gas Journal www.ogj.com, 29/03/2010).

New Hope Corporation and Infrastructure Capital Group have underpinned a $64.4 million funding package for WestSide Corporation’s acquisition of the Dawson Seamgas coal seam gas fields in the Bowen Basin. The two investors will back the acquisition through share placements to raise $8.1 million. They also will underwrite a $56.3 million one-for-one entitlement offer of new ordinary shares to existing shareholders. The funding and underwriting package should result in New Hope making a total investment of $23.3 million for a 19.9% stake in WestSide. Infrastructure Capital is expected to hold at least 13.5% from a $15.8 million investment. The ultimate ownership interests may vary depending on the allocation of any shortfall in subscriptions under the entitlement offer. The two companies also will be invited to nominate one representative each to join the board of WestSide as non-executive directors. Last month, WestSide announced it would form a joint venture with Mitsui E&P for the acquisition of the Dawson Seamgas coal seam gas fields. The company will pay Anglo Coal $26.8 million for its 51% stake in PL 94, which holds Dawson Seamgas. (Source: www.petroleumnews.net, 07/04/2010).

Santos announced on 13/04/2010 that it has signed a Gas Sale and Purchase Agreement with Wesfarmers Energy (Gas Sales) Ltd for the supply of up to 60 petajoules of gas over more than five years. The gas will be sourced from the John Brookes gas field offshore Western Australia and processed at the Varanus Island gas hub. Supply will commence in the second half of 2010. This contract will be solely supplied by Santos from its share of John Brookes’ production. Santos has a 45 per cent non-operating interest in the John Brookes gas field, with operator Apache Energy holding the other 55 per cent stake. (Source: Santos ASX/Media Release, 13/04/2010).

Icon Energy Ltd signed a Memorandum of Understanding for an exclusive 20-year gas sale contract with a subsidiary of the Chinese firm, SinoGas Group. In an export deal valued between $A23 billion to A32 billion, Icon would commence its first shipments of liquefied natural gas to China in 2014. The Gas Sale Agreement is scheduled for negotiation and execution by 31 August this year. (Source: Icon Energy Ltd media statement, 08/04/2010).

 

Development News

BG Group has signed a contract to supply China National Offshore Oil Corporation (CNOOC) with 3.6 million tonnes of liquefied natural gas per annum for 20 years from its Queensland Curtis LNG plant on Curtis Island near Gladstone, Queensland. BG said the contract was the world’s first full-termed sales and purchase agreement for the supply of LNG using coal seam gas as feedstock as well as the first sale of CSG-LNG into China. As part of the agreement, CNOOC will acquire a 5% equity interest in the reserves and resources of some BG tenements in the Walloons Fairway of the Surat Basin, Queensland, which are worth about $US270 million ($A295.2 million). CNOOC will also become a 10% equity investor in the first of two LNG trains at QCLNG and will reimburse BG for 10% of costs incurred in train 1 when the British gas major makes its final investment decision later this year. The two companies have agreed to participate in a consortium to construct two LNG ships in China that will be owned by the consortium. All agreements are conditional on Chinese, Queensland and Australian government approvals and on BG making the final investment decision on QCLNG. (Source: www.petroleumnews.net, 25/03/2010).

Norway’s Aker Solutions has secured one of the largest umbilical contracts ever awarded, winning a $A100 million contract to supply subsea umbilicals and associated equipment for the Gorgon project. Aker Solutions will supply 264 kilometres of steel tube umbilicals to connect Gorgon’s subsea production system to an onshore liquefied natural gas plant on Barrow Island. Engineering of the umbilicals will be managed out of Aker Solutions’ facilities in Oslo and Perth, and manufactured at the company’s facility in Moss, Norway, with final deliveries to be made in the second quarter of 2012. (Source: www.petroleumnews.net, 29/03/2010).

The ClimateSmart 2050 strategy “Queensland climate change strategy 2007: a low-carbon future” was released by the Queensland Government in June 2007 and the $50 million Queensland Renewable Energy Plan was established. This plan included $5 million to investigate additional sources of hot rocks for geothermal energy close to existing population centres and transmission lines through the Coastal Geothermal Energy Initiative. The initiative is a cooperative project between the Office of Clean Energy and Geological Survey of Queensland and is to undertake a targeted drilling program of ~35 shallow boreholes to a depth of 300–320m for collecting new datasets. New data collected will be used to identify heat anomalies along the east coast of Queensland and will provide background data for industry to consequently increase their exploration activities for geothermal energy in Queensland. An Invitation to Offer for selecting the contractor(s) to drill the boreholes was released on 10 March 2010. Once drilling has been completed, new temperature and thermal conductivity datasets will be collected in order to determine the heat flow regime for selected geological provinces in Queensland. This work is being undertaken in collaboration with Geoscience Australia. The drilling program is planned to commence in the middle of the year 2010 and it is anticipated that the initiative will be completed by early 2012. (Source: Geoscience Information Newsletter, March 2010).

Discoveries

Central Petroleum is on track to start drilling the Ooraminna 2 conventional well in the Amadeus Basin in late April or early May. Roadworks to access the Ooraminna 2 wellsite have been completed along with the construction of the drilling pad and siteworks. Ooraminna 2 is a step-out well to Ooraminna 1 which was the first well drilled by Exoil in the Amadeus Basin in 1963. The well flowed gas to the surface but Central believes the well was never properly tested. Ooraminna 2 will target a 300-square-kilometre surface anticline with potential in-place resources of up to 2 trillion cubic feet of gas. The well will be the first of up to six conventional wells Central plans to drill in the Amadeus and Pedirka Basins during the second half of 2010. (Source: www.petroleumnews.net, 24/03/2010).

Arrow Energy is moving to prove gas production potential in two New South Wales exploration leases it is farming into. The company said early exploration work at PEL 458 and PEL 464, which it is earning a 50% stake in from Apollo Gas, had indicated the potential of a new gas resource. Arrow said the first of two wells at PEL 458, Fullerton 2, was drilled to a total depth of 1082m and intersected 34m of net coal in 14 seams at the Upper Tomago coal measures. The second well, Fullerton 4, reached a total depth of 750m and intersected more than 37m of net coal in 18 coal seams. While gas content and composition testing is still in progress, preliminary results have confirmed the seams have high gas content. (Source: www.petroleumnews.net, 08/04/2010).

Orion Petroleum is hoping to find commercial oil with the Toenda 1 wildcat, a follow-up well to the Willaroo uncommercial oil discovery in PEL 6, northern NSW. Toenda 1 spudded with the Lucas Mitchell DRS026 rig on 11 April and marks the resumption of Orion’s conventional oil and gas exploration campaign in PEL 6. The well is 13 kilometres from Willaroo 1 and has the potential to host 31.4 million barrels of oil-in-place of which 7.7MMbbl is estimated to be recoverable. (Source: www.petroleumnews.net, 13/04/2010).

New Guinea Energy says remapping of the Panakawa prospect at PPL 267 in Papua New Guinea has identified a four-way closure at the Toro Formation that has allowed it to increase resource estimates. The company said the 6.5 square kilometre closure is interpreted to contain P90 resources of 24 million barrels of oil-in-place, up 267% from March 2009 estimates. The remapping was carried out with the addition of new regional seismic data allowing ties to key offset wells. NGE is now finalising the contractual arrangements with the rig provider, Australian Drilling Services, and third-party services required for the drilling program. (Source: www.petroleumnews.net, 13/04/2010).

Empire Oil has confirmed that the Gingin West 1 well in the Perth Basin is a new gas discovery.  The well flowed at a stabilised rate of 7.66 million cubic feet of gas and 301 barrels of condensate per day following a testing program on the D sand, with a maximum flow rate of 8.06MMcfd. The company has a trend of similar prospects over 60 kilometres and is planning to follow them up after drilling Gingin West 2 in Block A. Gingin West 1 is located over the Gingin West Block B prospect and was drilled to test a simple anticline located to the south and updip from the Bootine 1 gas discovery, drilled by Mesa in 1981. Current operations are to shut-in the well for a pressure build-up test, necessary for calculations of reserve estimates. The well is located within 1.6km of both the Parmelia and Dampier to Bunbury gas pipelines, allowing for rapid commercialisation.  Gingin West 2 will be drilled as a direction well and has estimated potential recoverable gas reserves of 58.9Bcf and 700,000bbl of condensate.  (Source: www.petroleumnews.net,14/4/2010).


Permit Updates and Changes

New South Wales

In the Clarence-Moreton Basin, PEL 432 was cancelled on 12/03/2010.

Also in the Clarence-Moreton Basin, PEL 426 and PEL 445 are in the process of being renewed.

In the Darling Basin, Red Sky Energy is renewing PEL 447, PEL 448 and PEL 449.

In the Sydney Basin, PEL 4 was renewed and will now expire on 10/11/2015 and PEL 454 is also being renewed.

Geothermal Permits

In the Sydney Basin, EL 6212 and EL 6740 are in the process of being renewed.

In the Lachlan Fold Belt, EL 7069 is being renewed.


 

Northern Territory

In the McArthur Basin, EP(A) 176 is under application by Armour Energy over 8,032 sq km.

In the Georgina Basin, Georgina Basin Energy is farming in to earn 50% from Baraka Petroleum in EP 127 and EP 128. Georgina Basin Energy will become operator and will fund all Baraka's exploration obligations up to completion of a well on each of EP 127 and EP 128 to earn 50% in both permits. This excludes the area surrounding the Elkedra prospect, in which Baraka Petroleum will retain 75%.

NT 08-3 in Bonaparte Basin did not receive any bids and reverts to vacant acreage.

In the Amadeus Basin, application EP(A) 146 has been withdrawn.


 

Queensland

In the Eromanga Basin, ATP 545P has been renewed and now expires on 31/01/2021.

In the Bowen Basin, Molopo Energy Ltd and Mitsui Coal Holdings have exercised their pre-emptive rights to acquire Anglo Coal's interest in ATP 602, ATP 564P and PL 94 FO (North).

In the Surat Basin, ATP 620P has had its expiry date extended to 28/02/2020.

Also in the Surat Basin, ATP 755P has been surrendered by Longreach Oil and Brisbane Petroleum. PL 280 over 91 sq km is currently under application and partially replaces ATP 755P.

Several permits have been partially relinquished and now cover the following areas:

Licence                       Basin                        Area (sq km)

ATP 809P                     Eromanga                     3,299 
ATP 813P                    
Drummond                    4,124
ATP 814P                    
Bowen                          1,826
ATP 817P                    
Surat Bowen                 4,306
ATP 819P                    
Surat                            3,178

In the Bowen Basin, the following are the new applications for Production Licences over existing exploration permits:

Application                  Applicant

PL 324                          Xstrata Coal Queensland P/L
PL 325 to PL 375           CH4 P/L
PL 376 to PL 391           Bow Blackwater CSG PL P/L

Geothermal Permits

In the Eromanga Basin, EPG 90 is under application by Clean Energy Australasia P/L.

In the Cooper Basin, EPG 91 is under application by KUTh Exploration P/L.


 

South Australia

In the Officer Basin, Ahava Resources P/L has applied for PELA 529 over 8,546 sq km and PELA 530 over 7,475 sq km.

In the Murray Basin, Liberty Resources Ltd has applied for PELA 531 over 9,914 sq km.

In the Eromanga Basin, PELA 522 has become a part of PELA 517.  The application now covers 9,985 sq km.

Application PELA 518 has been amended and now covers 9,321 sq km.      

In the Cooper Basin, Production Licence PPL 45 was renewed for the life of the field.

In the Otway Basin, PRL 2 was renewed and will now expire on 27/04/2015.

The following petroleum licences have had their expiry dates extended:

Licence                     Basin                New Expiry Date

PEL 111                     Cooper                   13/07/2010
PEL 138
                    Officer                    15/04/2015
PEL 499
                     Officer                    12/01/2013
PEL 186
                     Otway                    27/04/2011
PEL 187
                     Otway                    27/04/2011

Geothermal Permits

In the Eromanga Basin, GELA 502 was granted to Panax Geothermal Ltd as GEL 502 over 481 sq km. The permit will expire on 09/03/2015.

In the Arrowie Basin, GEL 156, GEL 178 and GEL 180 are now consolidated under GEL 156, which has been renewed until 22/11/2014 and now covers a total area of 1,000 sq km.  GEL 178 and GEL 180 were revoked.

In the Adelaide Fold Belt, GEL 228, GEL 229, GEL 263 and GEL 227 are now consolidated under GEL 227 with a total area of 1,964 sq km. GEL 228, GEL 229 and GEL 263 were revoked.

In the Murray Basin, GEL 175 and GEL 176 were surrendered.


 

Victoria

In the Gippsland Basin, Latrobe Fuels Ltd is farming in for up to 50% in PEP 166. Latrobe is required to drill at its own cost up to 2 wells. Drilling of the first well must commence by 31/12/2010.


 

Western Australia

In the Barrow Basin, WA-322-P has expired and WA-16-R has been renewed until 28/01/2015.

In the Barrow Basin, Kufpec Australia is withdrawing from WA-192-P.

In the Carnarvon Basin, Rialto Energy is farming out 20% of WA-399-P to Jacka Resources.

In the Perth Basin, EP 430 has been relinquished.

In the Canning Basing, EP 438 has undergone partial relinquishment and now covers a reduced area of 3,011 sq km. The permit term was extended until 22/12/2012.

In the Canning Basin, applications 3/08-9 EP and 4/08-9 EP by Backreef Oil Ltd and Chino Resources have been refused.

Also in the Canning Basin, available areas L 08-8 and L 08-9 did not receive any bids and were cancelled.

In the Bangemall Basin, SPA 1/09-0 AO, SPA 2/09-0 AO and SPA 3/09-0 AO that were under application by Greenpower Energy have been cancelled and will be replaced by 2010 onshore release areas.

A preliminary version of areas proposed for inclusion in the 2010 onshore Acreage Release has been included in this month's GPinfo:

Gazettal                   Basin                     Area (sq km)

T 10-1                       Perth                          1,331
L 10-1                       Canning                      4,113
L 10-2
                       Bangemall                 29,427
L 10-3
                       Bangemall                 29,236
L 10-4
                       Northeast WA            30,940
L 10-5  
                    Northeast WA            30,070

It should be noted that the proposed areas have not been finalised and are still subject to change.

Geothermal Permits

809 available areas have been gazetted covering the whole of the state. The opening date for bids is 09/04/2010 and the closing date is 22/07/2010.  Please see GPinfo for details.


 

New Zealand

Offshore in the Taranaki Basin, Octanex NZ Ltd have applied for APP 52593 over 3,513 sq km.

Also offshore in the Taranaki Basin, PEP 38483 has undergone a partial relinquishment and now covers a reduced area of 3,733 sq km. PEP 38483 H (Hector South Block) has also been relinquished.

Offshore in the Northland Basin, PEP 38602 was granted an extension of duration for a period of 3 months. The permit will now expire on 30/06/2010.

Offshore in the Taranaki Basin, PEP 38459 was granted an extension of duration and permit term was extended until 30/04/2010. 


Papua New Guinea

In the Papuan Basin, New Guinea Energy (NGE) has transferred to Talisman 15% of PPL 268 and 50% of PPL 269, in accordance with their farm-in agreement. Talisman is required to reimburse NGE $A1.24m in respect to direct costs NGE has expended in PPL 268 and $A4.68m in respect to direct costs it has expended in PPL 269.

Also in the Papuan Basin, Production Licence PDL 7 was issued over the entire area of PRL 12 and covers 257 sq km. 


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