February 2015

Monthly Update

The February 2015 data update is now available ...

Industry Summary

Mosman Oil & Gas has informed the board of MEO that Mosman is improving the terms of the proposal detailed in the December announcement by improving the consideration payable to MEO shareholders pursuant to the proposal ...

Permit Updates and Changes

Offshore, in the Sydney Basin, a suspension to PEP 11 was approved on 09/02/2015.  Year 2 of the work program has been suspended for 12 months to 12/08/2015 ...

 


Monthly Update

The February 2015 GPinfo update is now available.

For assistance, please contact GPinfo Support on 02 9475 3500.

 


Industry Summary

Company News

Mosman
Oil & Gas has informed the board of MEO that Mosman is improving the terms of the proposal detailed in the December announcement by improving the consideration payable to MEO shareholders pursuant to the proposal from 1 Mosman share for every 20 MEO shares to 1 Mosman share for every 10 MEO shares. (Source: Mosman Oil & Gas announcement, 19/01/2015).

Blue Energy has increased its 3C resources for ATP 814 in the Bowen Basin, Queensland by 21% or 657 PJ (recoverable gas) to a total of 3462 PJ. The upgrade follows an independent review of Blue Energy’s portfolio of assets by Netherland Sewell & Associates. The upgrade also increased the sub-categories of 1C and 2C contingent resources for the permit by 30% and 27% respectively. (Source: Blue Energy announcement, 20/01/2015).

Repsol’s $US8.3 billion takeover of Talisman Energy is facing a court challenge by a disgruntled shareholder. Shareholder James Baqleh sued on 20/01/2015 in New York state Supreme Court, seeking to stop the acquisition, saying the transaction is ‘grossly inadequate’ and investors would be ‘irreparably damaged’ if it’s completed, according to court filings, Bloomberg reported. The deal was reportedly devalued by more than $5 billion from Repsol's original July offer. (Source: Energy News Premium, 23/01/2015).

Origin Energy subsidiary Contact has entered into an agreement with Maui Development to purchase between 22 and 26 PJ of gas over a two-to-three year period, replacing a previous contract which expired at the end of 2014. The contract is designed to provide Contact with additional flexibility in the way it uses gas to run its thermal power stations in New Zealand. The company will also use gas from its Ahuroa gas storage facility to supply the stations. (Source: Origin Energy announcement, 22/01/2015).

Empire Oil & Gas
is pleased to advise an increase in proven gas and condensate reserves for the B Sand of the Red Gully 1 well, in production licence L 18 in the Northern Perth Basin. This follows an independent resource evaluation report prepared by RISC. The gas reserves have now been graded at 2P resources of 14.5 PJ, a significant step up from the prior estimate of 10.7 PJ. 1P gas reserves are up 35.4% to 8.39 PJ. 1P and 2P condensate reserves are up 18.6% to 340 MSTB and 21.2% to 557 MSTB respectively. The Red Gully 1 B Sand has been in production for approximately 7 months. (Source: Empire Oil & Gas announcement, 22/01/2015).

Central Petroleum has announced it will begin early gas sales to the Northern Territory Power & Water Corporation under an agreement previously made with Magellan Petroleum. Under the agreement, Central will immediately begin selling 2 TJ of gas per day from its Palm Valley gas field in advance of the gas being supplied from the Dingo gas field, which the company says is on schedule for completion in Q2 2015. (Source: Central Petroleum announcement, 09/02/2015).

The new Victorian Labor Government has extended the
coal seam gas (CSG) exploration and hydraulic fracturing ban in the state and launched another parliamentary inquiry. The previous Liberal government imposed a moratorium on approvals for new CSG exploration licenses and fraccing approvals for all existing mineral and petroleum licences in August 2012. This was subsequently extended till July 2015. The new moratorium will ban drilling and fraccing until at least 2016. (Source: Oil & Gas Journal, 30/01/2015).

NZOG Offshore, a wholly owned subsidiary of New Zealand Oil & Gas, has made an unconditional takeover offer for shares that it does not already own in Cue Energy Resources. The offer is for $0.10 per Cue share and expires 27/03/2015. Cue has advised shareholders to reject the offer. (Source: Cue Energy announcement, 12/02/2015).

Development News

ExxonMobil has signed a memorandum of understanding with the PNG government with respect to supply gas to power plants in exchange for allowing the PNG LNG joint venture to develop a new gas field and to expand to a third LNG train. It is likely the development of the P’nyang gas field in PRL 3 could be the supply source for the LNG plant expansion. Under the agreement, PNG LNG will supply up to 20 mmcfd for 20 years to help the country improve the capacity and reliability of its power supply.  Up to 25 megawatts of electrical power will be provided to Port Moresby via the PNG LNG facilities for an interim period, while the government addresses long-term power generation options. The JV will also be awarded a petroleum development licence and associated  pipeline licences for the field, with a timeline set out in the MOU for a final investment decision to be made on the third LNG train by no later than the end of 2017. (Source: ExxonMobil announcement, 16/01/2015).

Chevron Corporation, through its Australian subsidiaries, has signed a binding sales agreement with a subsidiary of South Korean conglomerate SK Group for the supply of LNG from the Gorgon Project. Under the agreement, 4.15 million tonnes per annum of LNG will be supplied to SK LNG Trading Pte Ltd over a five-year period starting in 2017. I
n addition, the Gorgon project recently reached its 90% completion milestone with both of the project’s LNG tanks ready to receive LNG.
(Source: Chevron Corporation announcement, 20/01/2015, Energy News Bulletin, 11/02/2015).

The Santos-operated Gladstone LNG Project will comfortably hit its goal of achieving first export cargo in the second half of 2015, according to Macquarie Wealth Management. While the broker viewed that the upstream drilling progress remained low for the project, it said the six-nine month LNG plant commissioning process had well and truly started, with the firing of the first gas turbine expected in coming weeks marking a major milestone. (Source: Energy News Bulletin, 27/01/2015).

Santos is in talks with gas buyers, manufacturers and international companies as part of plans to sell about 30% of its $A2 billion Narrabri CSG Project in New South Wales, according to the Sydney Morning Herald. “We are in active conversations with a number of parties,” Santos vice-president eastern Australia James Baulderstone said. He told the newspaper that the oil price tumble did pose challenges to the sell-down negotiations. The start of production was also more likely in the “back end of the decade” compared to the 2016 goal of several years ago. (Source: Energy News Premium, 22/01/2015).

Woodside Petroleum has awarded a contract to Wood Group Kenny for the front-end engineering design contract of the flowline system and procurement support for its Greater Western Flank Phase 2 (GWF2) development on the North West Shelf. The scope of work includes engineering and procurement support services for the 16' GWF2 corrosion resistant alloy rigid flowline system, flowline end termination structures, inline tee assembly structures, mid connection structure and subsea tie-in spools. The primary engineering focus of the GWF2 flowline FEED is to develop the flowline system for the final investment decision planned for the second half of 2015. GWF2 includes development of Keast, Dockrell, Sculptor, Rankin, Lady Nora, and Pemperton fields. (Source: Energy News Bulletin, 05/02/2015).

First gas from Origin Energy and ConocoPhillips’ Australia Pacific LNG Project from their Surat Basin CSG fields has arrived at the LNG facility on Curtis Island near Gladstone. The arrival of the first gas into the LNG facility also marks the completion of commissioning of the 530 km high pressure gas pipeline, another important milestone for the project. The announcement follows BG Group’s on 05/01/2015 that the first LNG tanker departed from Gladstone that day from its Queensland Curtis LNG project, marking the start of Australia’s transformation to being the world’s largest LNG supplier. The completion of the pipeline and the arrival of the gas means APLNG can initiate the commissioning of the power generation facilities on the island. (Source: Energy News Bulletin, 12/02/2015).

Royal Dutch Shell's plans to develop its Arrow LNG Project with PetroChina have been cancelled. Arrow Energy, which is jointly owned by Shell and PetroChina, had initially planned to develop a CSG to LNG processing facility on Curtis Island, Queensland. The news follows Shell’s decision to cut global spending by US$15 billion, which will be spread over three years. Work is continuing on the development of the Arrow CSG reserves in Queensland, which are now likely to be commercialised through a separate LNG project, with front-end engineering design (FEED) work progressing on the Arrow Bowen Pipeline. (Source: Energy News Premium, 02/02/2015).

AGL is expecting delays in the start-up of gas production at its Gloucester CSG project. The delay follows the stalling of a pilot test at the company’s contentious Waukivory project after BTEX (benzene, toluene, ethylbenzene, and xylenes) were found in flowback water taken from two of four wells and an above ground storage tank. The find spurred the Environmental Protection Agency to investigate, with AGL maintaining that the chemicals did not come from its fraccing fluid and that they were probably naturally occurring. The company is awaiting the outcome of the investigation, meanwhile, the stalling of the pilot project means it cannot go ahead with Gloucester. (Source: Energy News Bulletin, 12/02/2015).

The deepwater pipe-lay section of the 889 km gas export pipeline being built at INPEX’s Ichthys Project has begun. INPEX are now a major step closer to physically connecting the onshore LNG facilities to the Ichthys field, where the offshore facilities will be moored for the 40-plus year life of the project. The deepwater section is touted for completion late this year. In addition, INPEX has started development drilling at the offshore Ichthys gas-condensate field in Western Australia. The development campaign will target the Brewster reservoir with 20 production wells planned.
(Source: Energy News, 10/02/2015 & 05/02/2015).

There has been renewed uncertainty over the development of the Woodside operated Greater Sunrise gas field in the Timor Sea following an East Timorese parliamentary law passed last week. This came in the wake of the resignation of East Timor’s Prime Minister Xanana Gusmao. The new law established a maritime council with the intent of settling permanent boundaries with Australia in the area now known as the Joint Petroleum Development Area or Timor Gap. Government spokesman Agio Pereira said East Timor considered the current Certain Maritime Arrangements in the Timor Sea accord (CMATS), which covers the Sunrise area, to be invalid. Under CMATS, Australia and East Timor have equal shares in royalties from the 5 tcf of gas in the Sunrise fields. Setting a permanent boundary could shift the resource entirely into East Timorese waters, depending on where it was set. (Source: Oil & Gas Journal, 10/02/2015).

Discoveries

Hanson 2
was drilled as a development well 450 metres to the east of the currently producing Hanson 1 well. Hanson 2 intersected the target top Namur Sandstone 1.8 metres high to prognosis, with six metres of net oil pay in the McKinlay Member and Namur Sandstone reservoirs. The well has been cased and suspended as a future oil producer. (Source: Beach Energy announcement, 04/02/2015).

Drillsearch and Beach Energy have reported a wet gas discovery in their Ralgnal 1 well in the Cooper Basin. The well was assessed to contain 6.6 metres of net pay in the Patchawarra formation and 3 metres in the Tirrawarra. Gas flowed to surface at 5.88 mmscf/d during drill stem tests, with flow rates for condensate currently under review. Drillsearch said the well would be cased and suspended as a new discovery. (Source: Drillsearch announcement, 10/02/2015).

 


Permit Updates and Changes

New South Wales


Offshore, in the Sydney Basin, a suspension to PEP 11 was approved on 09/02/2015.  Year 2 of the work program has been suspended for 12 months to 12/08/2015.

Onshore, in the Gunnedah Basin, PEL 1 and PEL 433 are in the process of being renewed.


Northern Territory

On the Ashmore Platform, the year 3 work program for AC/P 55 has been extended by 12 months from 03/05/2015 to 03/05/2016. The licence has had its expiry date extended to 03/05/2019.

In the Vulcan Basin, Murphy Australia Oil P/L has transferred its interest in AC/P 57 to subsidiary Murphy Australia AC/P 57 Oil P/L.

Also in the Vulcan Basin, Murphy Australia Oil P/L has transferred its interest in AC/P 58 to subsidiary Murphy Australia AC/P 58 Oil P/L.

In the Bonaparte Basin, MEO has elected to withdraw from the Blackwood area of NT/P 68, transferring its interest in the area to Eni Australia Ltd.

In the Amadeus Basin, EP 105 has been extended to 27/11/2015.

In the
Pedirka Basin, EP 163 has been extended to 13/05/2016.

In the McArthur Basin, EP 189
has been extended to 20/11/2017.

In the
Pedirka Basin, EP 93 and EP 97 have been extended to 29/01/2019 and 22/02/2017 respectively.

In the McArthur Basin, applications EP(A) 154 and EP(A) 187 have been varied and now cover  reduced areas of 6,573 sq km and 3,003 sq km respectively.


Queensland

Applications for gazettal areas PLR 2014-2-1 and PLR 2014-2-2 closed on 29/01/2015 and are currently under consideration.

In the Eromanga Basin, Real Energy is the preferred tenderer for PLR 2014-1-4 which closed on 29/09/2014.

In the Surat Basin, ATP 471 is being renewed as ATP 1190.

In the Eromanga Basin, ATP 862 has undergone a partial relinquishment and now covers a reduced area of 2,501 sq km.

In the Adavale Basin, ATP 864 and ATP 865 have been relinquished and now revert to vacant acreage.

In the Georgina Basin, Total holds 10% of ATP 909, ATP 911 and ATP 912 until Stage 1 is complete, after which they will have earned 20%.  Total will increase their interest to 40% on completion of Stage 2 and to 68% on completion of Stage 3.  Work programs for the licences are as follows:

ATP 909

Year 1
: G&G & environmental studies
Year 2: 150 km 2D seismic or equivalent 3D seismic
Year 3: 50 sq km 3D seismic or 100 km 2D seismic
Year 4: 2 wells to 2500m or 4 wells to 1000m to 1500m
(11/03/2013 to 10/03/2017)

ATP 911

Year 1
: G&G & environmental studies
Year 2: 150 km 2D seismic
Year 3: 100 km 2D seismic or equivalent 3D seismic
Year 4: 6 wells from 500m to 1000m
(11/03/2013 to 10/03/2017)

ATP 912

Year 1
: G&G & environmental studies
Year 2: 150 km 2D seismic
Year 3: 100 km 2D seismic or equivalent 3D seismic
Year 4: 6 wells from 500m to 1000m
(11/03/2013 to 10/03/2017)

In the Cooper Basin, ATP 940 has had Year 3 of its work program amended from 10 shallow wells to 200m to 6 deep wells to 3700m.

In the Eromanga Basin, documentation and regulatory approvals are being finalised for Exoma's (Longreach Number 2) withdrawal from ATP 996, ATP 999 and ATP 1005 and the transfer of its 50% interest to CNOOC Galilee Gas Co P/L.

In the Surat Basin, ATP 1183 has had its expiry date extended to 30/06/2020.

In the Bowen Basin, production licence applications PL 448, 449 and 454 have been withdrawn.

In the Surat Basin, Australia Pacific LNG P/L 100% have applied for production licence PL 1011 over the Condabri South field.


South Australia

In the Murray Basin, PEL 127 is being relinquished.

In the Eromanga Basin,
PEL 575
was relinquished 19/12/2014.

In the Eromanga Basin, PEL 71 is being relinquished.

In the Murray Basin, Liberty is withdrawing application PELA 531.

In the
Killanoola Basin, on 05/11/2014 Rawson announced the execution of a Memorandum of Understanding with an ASX-listed company, giving it exclusivity to consider farming into the Killanoola oil field PRL 13. The exclusivity period lapsed in December 2014 and the reviewing company has decided not to progress the farm-in opportunity.


Tasmania

In the Bass Basin, retention lease applications are being prepared for the White Ibis, Trefoil, Rockhopper and Bass locations in T/18P.


Victoria

In the Otway Basin, Tap Oil has elected not to proceed with its option to acquire 10% of VIC/P 67.


Western Australia

In the Carnarvon, Barrow and Browse Basins, cash bid areas W 14-20, W 14-21, W 14-22 and W 14-23 closed 05/02/2015 and are under consideration.

In the Browse Basin, the year 6 work program for WA-314-P has been extended by 6 months from 11/08/2014 to 11/08/2015. The licence has had its expiry date extended to 11/08/2015.

In the Carnarvon Basin, WA-348-P was relinquished on 04/02/2015.

In the Carnarvon Basin, the year 4 work program for WA-350-P has been extended by 6 months from 22/02/2015 to 22/08/2015. The licence has had its expiry date extended to 22/08/2016.

In the Barrow Basin, OMV has entered a farm-out agreement with Woodside Energy Ltd, under which OMV has agreed to assign to Woodside a 75% interest in WA-358-P. Furthermore, the year 4 work program is now: 280 sq km 3D seismic, geotechnical studies - $4.5m.

In the Carnarvon Basin, the Achilles/Satyr location WA-374-P LA has been varied and now covers and increased area of 1,290 sq km.

In the Carnarvon Basin, the year 2 work program for WA-386-P has been extended by 12 months from 06/02/2015 to 06/02/2016. The licence has had its expiry date extended to 06/02/2019. The year 2 work program is now - 1200 km 2D seismic - $2.5m.  Furthermore, Octanex has executed a sales and purchase agreement with Shell Australia P/L in respect of WA-386-P for consideration of $0.35m. The sale is subject to satisfaction of certain conditions including FIRB approval, joint authority approval for a 12 month suspension & extension and receipt of consent to the dealing and transfer. It is anticipated the sale will be completed in the Q1 2015.

In the Carnarvon Basin, the year 2 work program for WA-387-P is now: 700 km 2D seismic, petrophysical and QI analysis - $1.35m.

In the Carnarvon Basin,
Cue has agreed to acquire 100% of WA-409-P due to the withdrawal of the other JV parties.

In the Carnarvon Basin, WA-460-P is being relinquished.

In the Carnarvon Basin, the years 4, 5 & 6 work program for WA-480-P are now -

Year 4: 4000 sq km 3D seismic, G&G studies $30m
Year 5: G&G studies $10m
Year 6: 1 well, G&G studies $103.7m

In the Barrow Basin, W 14-15 was granted as WA-510-P to Apache Northwest P/L 100% on 29/01/2015. The licence will expire 28/01/2021. Work program is as follows –

Year 1: seismic preparation $0.5m
Year 2: 335 sq km 3D seismic $8.5m
Year 3: process 325 sq km 3D seismic, reprocess 80 sq km 3D seismic, rock physics/QI and 3D seismic inversion studies $1m
Year 4: well planning $0.35m
Year 5: 1 well $20m
Year 6: geotechnical studies $0.2m

In the Carnarvon Basin, W 13-16 was granted as WA-511-P to AWE (Carnarvon P/L) on 04/02/2015. The licence will expire on 03/02/2021. Work program is as follows –

Year 1: 718 sq km 3D seismic, G&G studies $5.05m
Year 2: 3D seismic inversion, G&G studies $0.75m
Year 3: 300 km 2D seismic, G&G studies $1.75m
Year 4: G&G studies $0.25m
Year 5
: G&G studies $0.25m
Year 6: 1 well, G&G studies $50.25m

In the Perth Basin, W 13-19 was granted as WA-512-P to AWE (Offshore PB) P/L on 04/02/2015. The licence will expire on 03/02/2021. Work program is as follows –

Year 1: 1000 km 2D seismic reprocessing, 525 sq km 3D seismic reprocessing, G&G $0.91m
Year 2: rock physics studies & 3D seismic inversion, G&G studies $0.35m
Year 3: 560 km 2D seismic, G&G studies $1.75m
Year 4: G&G studies $0.25m
Year 5: 1 well $25m
Year 6: G&G studies $0.25m

In the Barrow Basin, WA-12-L is being renewed.

In the
Petrel Sub Basin, WA-18-P was relinquished on 04/02/2015.

In the Barrow Basin, TR/6 has been renewed to 01/02/2020. Work program is as follows –

Year 1: engineering studies $0.05m
Year 2: engineering studies $0.05m
Year 3: marketing & commercial studies $0.03m
Year 4: marketing & commercial studies $0.03m
Year 5: field development $0.3m

In the Canning Basin, FAR and Pancontinental Oil & Gas have advised of their intentions to withdraw from EP 104, L 15 and R 1. Furthermore, EP 104 has been renewed to 29/01/2020. Work program is as follows -

Year 1: G&G studies, 130 km 2D seismic reprocessing $0.5m
Year 2: geochemical studies $0.5m
Year 3: 1 well $6m
Year 4: G&G studies $0.25m
Year 5: 1 well $7m

In the Carnarvon Basin, EP 110 is being relinquished.

In the Perth Basin, Empire has secured shareholder approval to buy the WA gas assets of ERM Power Ltd. Subject to regulatory approval Empire will now hold 100% of EP 389, EP 416, EP 432, EP 440, EP 454, EP 467, EP 480, L 18, L 19 and 77.78% of EP 426.

In the Canning Basin, EP 391 has been renewed to 31/01/2020. Work program is as follows –

Year 1: 220 sq km 3D seismic interpretation, 130 sq km 3D seismic reprocessing, G&G studies $0.75m
Year 2: 800 km aero gravity, G&G studies $0.65m
Year 3: 1 well $8m
Year 4: G&G studies $0.35m
Year 5: 1 well $8m

In the Perth Basin, EP 407 has been relinquished.

In the Canning Basin, the year 5 work program for EP 456 has been extended by 12 months from 31/12/2014 to 31/12/2015. The licence has had its expiry date extended to 31/12/2016.

In the Canning Basin, EP 474 was relinquished on 23/01/2015.

In the Carnarvon Basin, Carnarvon Petroleum has entered into an agreement to acquire EP 475 at a nominal cost. The acquisition is currently subject to the standard government approvals.

In the Canning Basin, Octanex NL has, after expiry of the year’s extension, decided to terminate the Deed of Sale and Co-Operation made between Octanex and Oil Basins dated 23/01/2013 with regards to EP 487. As a result Octanex has no interest in or claim on EP 487. Furthermore, Oil Basins has advised by the State Administrative Tribunal that the decision for publication on the Oil Basins vs. Backreef Oil dispute has been extended until 03/03/2015.

In the
Barrow Basin, R 4 is being renewed.

In the Officer Basin,
L 13-4 is under application as STP-EPA-116 by Tamboran Resources P/L.

In the Officer Basin, L 13-5 is under application as STP-EPA-118 by Australasian Energy P/L.

In the Perth Basin, L 13-3 is under application as STP-EPA-123 by Dragon Energy Ltd.

In the Perth Basin, SPA 16 AO is under application as STP-EPA-137.

In the Perth Basin, Eneabba Gas Ltd has signed a farm-in agreement with Finder No 6 P/L covering the Ocean Hill Block STP-EPA-90. Under the agreement, subject to the satisfaction of several conditions precedent as to native title, permit award and funding, Finder has agreed to fund a two stage work program to earn 85% interest. Finder will operate the joint venture and may elect to withdraw from the joint venture after the year one program. Farm-in operations will commence following permit award and the subsequent completion of the Green Rock Energy/Eneabba agreement which is also subject to the award of the permit.

Geothermal

In the Perth Basin, GEP 5 and GEP 6 were relinquished on 30/01/2015.


New Zealand

In the Taranaki Basin, PEP 38459 has expired.

Also in the Taranaki Basin, Todd Exploration Ltd has transferred its interest in PEP 51149 to Todd Energy Ltd.

In the Canterbury Basin,
PEP 52589 has been renewed to 9/11/2020. Work program is as follows –

15 months: geochemical sampling
18 months: 300 km 2D seismic reprocessing
24 months: geochemical sampling, 40 km 2D seismic
30 months: 40 km 2D seismic
42 months: 40 km 2D seismic
60 months: 1 well
72 months: 1 well
84 months: geochemical sampling
96 months: 1 well
108 months: 1 well


Papua New Guinea

In the Papuan Basin, an application for a production licence is currently being finalised over PRL 3 over the P’nyang field.


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