February 2016 GPinfo Update                                                                                            


 

Industry Summary

 

AEGP Australia P/L has started proceedings in the Supreme Court of Queensland in respect of the farm-out agreement (FOA) of Armour Energy’s Northern Territory licenses. Armour said that AEGP had failed to accept the form of deeds that would allow for the transfer of native title documents

 

Middleton East 1 targeted the Patchawarra Formation with a secondary Tirrawarra Sandstone target and was cased and suspended following initial interpretation of wireline petrophysical and pressure data, which indicated six gas zones …

 

Permit Updates and Changes

 

On 06/06/2016, the Australian Government is scheduled to announce the 2016 Offshore Petroleum Exploration Acreage Release at the APPEA Conference in Brisbane, Queensland

 

Offshore in the Sydney Basin, Years 2 and 3 of the work program for PEP 11 have been suspended for a period of 12 months to 12/08/2016.  The licence term has been extended to 12/08/2018. An additional condition has been imposed with requires a signed contract for a seismic vessel no later than 12/08/2016, which establishes a firm schedule for undertaking the Permit Year 2 seismic …

 

 

 Industry Summary                                      

 

Company News

 

AEGP Australia P/L has started proceedings in the Supreme Court of Queensland in respect of the farm-out agreement (FOA) of Armour Energy’s Northern Territory licenses. Armour said that AEGP had failed to accept the form of deeds that would allow for the transfer of native title documents. This, Armour said, would let it terminate or renegotiate the farm-in terms. AEGP is seeking a number of rulings, including that Armour is not entitled to terminate the FOA. The proceedings were returnable on 09/02/2016. AEP failed to close the deal, thus, Armour has instituted separate proceedings in the Supreme Court forcing the farm-out to be completed and performed, or that its right to terminate is protected. (Source: Armour Energy announcement, 18/01/2016, 04/02/2016).

 

Drillsearch Energy shareholders have overwhelmingly approved the scheme of arrangement to implement the proposed merger with Beach Energy. At the meeting, approximately 99% of votes were in favour of the merger. The focus of both companies is to press ahead with implementation of the proposed merger and to successfully integrate the two businesses to drive value from the combination. A court hearing to consider the merger is planned for 18/02/2016, with the deal expected to be implemented in March. (Source: Drillsearch Energy announcement, Beach Energy announcement, 27/01/2016).

 

Royal Dutch Shell plc has successfully completed the merger with BG Group after delivering the court order to the registrar of companies, following the court’s sanctioning of the scheme at a hearing on 11/02/2016. BG group will now be officially delisted from the London Stock Exchange after Royal Dutch Shell’s scheme of arrangement with the group has become effective. The entire issued ordinary share capital of BG Group is now owned by Shell. (Source: Energy News Premium, 15/02/2016).

 

Empire Oil & Gas has received the independent assessment of the gas resources encountered by the Red Gully North 1 and Gingin 1 wells located in EP 389 from RISC. It shows the C and D sands of the Cattamarra Coal Measures in Red Gully North 1 were in line with pre-drill expectations and resources are likely to be 10.7 PJ and 125,000 bbl condensate (2C) across the two zones. As a result of the Red Gully North 1 well, the aggregate 2C gas and condensate contingent resources have been increased by 2.8 PJ and 35,000 bbl respectively. The 1970’s Gingin 1 well is interpreted to be part of the same accumulation and produced 1.7 bcf of gas from the D sand. (Source: Empire Oil & Gas announcement, 05/02/2016).

 

AGL Energy has decided to exit the natural gas exploration and production business, a move that includes walking away from several Coal Seam Gas projects. Specifically the company is abandoning its Gloucester CSG project in northern New South Wales and it will cease production in 2023 from its Camden gas project near Sydney, also in New South Wales. In addition, AGL plans to sell its gas assets at Moranbah, Silver Springs, and Spring Gully, all of which are in Queensland. (Source: AGL Energy announcement, 04/02/2016).

 

Empire Energy Group and American Energy Partners are pleased to announce that the Foreign Investment Review Board condition has been satisfied. AEP is proceeding with the farm-in for up to 80% in Empire’s 14.6 million acres in the McArthur Basin by spending $85 million over a three year period. Completion of all conditions set out the agreement must be on or before 20/04/2016 unless extended. (Source: Empire Energy Group announcement, 10/02/2016).

 


 

Developments

 

Chevron Australia has signed a preliminary agreement with ENN LNG Trading Company Ltd for the delivery of LNG to China from the Gorgon natural gas project off Western Australia. Once finalised, the 10-year deal would see Chevron supply ENN with as much as 0.5 mtpa of LNG, with deliveries starting in 2018. The terms of the deal were not released, but pricing will be linked to oil contracts. (Source: Chevron announcement, 18/01/2016).

 

Wood Group has secured a three year contract with Shell Australia's Prelude FLNG project located 475 km north-northeast of Broome in Western Australia. Wood Group Kenny will provide specialist consultancy services for flexible riser integrity management prior to and during operation of Prelude FLNG. The focus of the contract will be the development and implementation of the flexible riser integrity management plan, as well as inspection, monitoring, testing and on call engineering support. This contract, effective immediately, follows Wood Group Kenny's successful design of Prelude's subsea flowlines. (Source: OilVoice 19/01/2016).

Shell and its partners have submitted an updated environmental plan for the Prelude FLNG project, which the National Offshore Petroleum Safety and Environmental Management Authority is expected to make a decision on by mid-February. The plan covers the arrival of the FLNG vessel, currently undergoing partial commissioning in South Korea, the offshore works, hook-up and commissioning, start-up and the two-decade long operations phase. Production is targeted to begin before the end of 2016. (Source: Energy News Bulletin, 21/01/2016).

 

The final module load out for the Inpex-operated Ichthys LNG onshore facilities has been completed in Thailand, with the vital component now under sail to the Northern Territory. The final module installation is set to take place this year, paving the way for the pre-commissioning, commissioning and start up phases of the project in 2017.  The permanent operations facilities will also be completed this year, signifying the transition from the construction phase to the long term operation of the LNG plant. (Source: Energy News Bulletin, 22/01/2016).

 

Engineering and project services company Clough has secured a second hook-up contract for INPEX’s Ichthys project in as many days. It follows yesterday’s award of a similar contract with Samsung Heavy Industries. This time it has secured the contract for hook-up services on the Ichthys LNG floating, production, storage and offloading facility for Daewoo Shipbuilding & Marine Engineering. The scope of work includes the preparation and execution of offshore hook-up and assistance to commissioning within weeks. (Source: Energy News Premium, 28/01/2016).

 

FMC Technologies has signed an agreement with Woodside Petroleum for the design, manufacture and supply of subsea production systems for the Greater Western Flank Phase 2 (GWF 2) project on the North West Shelf offshore Western Australia. The contract is valued at approximately $180 million and includes: subsea production trees, wellheads, manifolds, subsea and topside controls, and flowline connection systems. Deliveries are expected to begin in 2016 and continue through 2018. GWF 2 is expected to produce 1.6 tcf of natural gas with production expected to begin production in 2019. (Source: Energy News Bulletin, 28/01/2016).

 

Chevron has confirmed that its $A29 billion Wheatstone project would be delayed by around six months. The project is now expected on stream in mid-2017. Chevron Chief Executive Officer John Watson blamed the delay on the slow schedule of construction of the LNG plant modules in Malaysia. Woodside, a joint venture partner in Wheatstone, advised the Julimar project, which will supply gas to the Wheatstone onshore plant, remains on schedule and on budget. (Source: Oil & Gas Journal, 01/02/2016, Woodside Petroleum, 01/02/2016).

 

Fugro has been awarded a contract by BHP Billiton Petroleum for the Pyrenees Phase 3 Installation Project, offshore Western Australia. The Pyrenees development comprises six separate fields: Stickle, Crosby, Tanglehead, Moondyne, Wild Bull and Ravensworth. The project includes the tie back of the Stickle 9 well to the existing Tanglehead manifold. Starting in May 2016, Fugro’s scope of work includes suspension of existing infrastructure, and installation and pre-commissioning of the new flexibles and flying leads. ROV intervention and well commissioning support will be provided and the scope also includes the supply and fabrication of crossings, stabilisation and installation aids, along with mobilisation and transportation of equipment to the field. (Source: OilVoice, 04/02/2016).

 


 

Discoveries

 

Middleton East 1 targeted the Patchawarra Formation with a secondary Tirrawarra Sandstone target and was cased and suspended following initial interpretation of wireline petrophysical and pressure data, which indicated six gas zones. Beach estimated net pay of 9.3m, including 4.9m intersected within the primary target zone, while Drillsearch estimated net pay of 16m, including a new zone in the Basal Patchawarra Formation. Extended production testing is expected to be undertaken at a later date. (Source: Beach Energy announcement, 03/02/2016, Drillsearch Energy announcement, 04/02/2016).

 

 Permit Changes                                                                

 

2016 Offshore Petroleum Exploration Acreage Release – Proposed Areas

 

On 06/06/2016, the Australian Government is scheduled to announce the 2016 Offshore Petroleum Exploration Acreage Release at the APPEA Conference in Brisbane, Queensland.

 

Following a record number of industry nominations for the 2015 acreage release, there was a further increase in the number of nominations and the number of companies nominating for the 2016 acreage release.  Over 99 nominations were received from 18 companies.  There are 29 areas proposed for inclusion in the 2016 acreage release.  The proposed areas and associated boundaries are yet to be finalised and remain subject to change until the 2016 acreage is officially launched.

 

Please note that any work or forward planning undertaken by companies in relation to the proposed areas prior to the official launch is done at the commercial risk and cost of individual companies.  (Source:  Australian Petroleum News, February 2016).

 

Permit

Basin

Area (sq km)

AC 16-1

Vulcan Sub

168

AC 16-2

Vulcan Sub

168

AC 16-3

Browse

1512

AC 16-4

Browse

4197

W 16-1

Petrel Sub

5260

W 16-2

Bonaparte

5430

W 16-3

Browse

84

W 16-4

Browse

26456

W 16-5

Browse

2826

W 16-6

Canning

12500

W 16-7

Rowley Sub

7622

W 16-8

Roebuck

6609

W 16-9

Carnarvon

1222

W 16-10

Carnarvon

650

W 16-11

Carnarvon

325

W 16-12

Carnarvon

4810

W 16-13

Carnarvon

892

W 16-14

Carnarvon

7568

W 16-15

Carnarvon

324

W 16-16

Carnarvon

486

W 16-17

Carnarvon

162

W 16-18

Carnarvon

10892

W 16-19

Carnarvon

162

W 16-20

Carnarvon

7019

W 16-21

Carnarvon

3161

W 16-22

Dampier

161

W 16-23

Barrow Sub

1242

W 16-24

Carnarvon

963

W 16-25

Carnarvon

160

 


 

New South Wales

 

Offshore in the Sydney Basin, Years 2 and 3 of the work program for PEP 11 have been suspended for a period of 12 months to 12/08/2016.  The licence term has been extended to 12/08/2018. An additional condition has been imposed with requires a signed contract for a seismic vessel no later than 12/08/2016, which establishes a firm schedule for undertaking the Permit Year 2 seismic.

 

Onshore, in the New England Fold Belt, PEL 285 has been relinquished and now reverts to vacant acreage.

 

In the Gunnedah Basin, PEL 434 is in the process of being renewed.

 


 

Northern Territory

 

In the Browse Basin, the year 4 work program of AC/P 36 has been extended by 24 months from 08/02/2016 to 07/02/2018. The licence has had its expiry date extended to 07/02/2019. A change to the work program has been approved -

Year 4: G&G, 38 sq km seismic testing, 267 sq km seismic reprocessing & inversion, seismic interpretation $1.93m

 

In the Petrel Sub Basin, cash bid area NT 15-2 closed 04/02/2016. No cash bids were received and the area reverts to vacant acreage.

 

In the Beetaloo Basin, EPNT 14-3 has been re-released. Bids close 04/08/2016.

 


 

Queensland

 

In the Eromanga Basin, Drillsearch has signed a sales and purchase agreement to dispose of its 40% interest in ATP 299 (and associated production licences), subject to JV and regulatory approvals.

 

In the Galilee Basin, Lakes has applied for a change to the 2016 work program for ATP 642 and ATP 662.  It hopes to conduct a cost effective regional survey using remote-sensing multi-spectral fracture analysis and geochemical sampling to identify potential hydrocarbon leakage sites and calibrate these with known hydrocarbon signatures in the vicinity.  These results would identify areas to be the focus of seismic and airborne gravity acquisition.

 

In the Eromanga Basin, Beach Energy has withdrawn from ATP 732 and its 50% will be re-assigned to Bengal Energy for nil consideration.

 

In the Surat/Bowen Basin, a two year extension has been granted to the ATP 965 work program.  The program is required to be completed by 31/03/2017.

 

In the Eromanga Basin, Beach's acquisition of 40% of ATP 1056 from AGL has been pre-empted.  Interests are yet to be finalised.

 

Also in the Eromanga Basin, preferred tenderer Real Energy has not accepted ATP 1161. No further decision has been made on whether to appoint a new preferred tenderer.

 


 

South Australia

 

In the Eromanga Basin, a change to the PEL 112 work program has been approved -


Year 3
: G&G studies

 

Also in the Eromanga Basin, PEL 444 is being renewed.

 

In the Otway Basin, PEL 82 has been suspended from 04/03/2016 to 03/03/2017. The licence has had its expiry date extended to 03/03/2017.

 

In the Pedirka Basin, application PELA 159 has been varied and now covers a reduced area of 9037 sq km.

 

In the Eromanga Basin, application PELA 334 has been varied and now covers an increased area of 10008 sq km.

 

In the Eromanga Basin, application PELA 335 has been varied and now covers a reduced area of 7509 sq km.

 

In the Eromanga Basin, ARP TriEnergy P/L has applied for PELA 661 over 3174 sq km.

 

Geothermal

 

In the Arrowie Basin, GEL 128 and GEL 559 have expired. The areas revert to vacant acreage.

 


 

Tasmania

 

In the Tasmania Basin, applications for ERA 981 closed on 22/01/2016 and are currently under consideration.  Tasmania Oil and Gas Australia Ltd announced that it has applied for the area.  Majority shareholders in Tasmania Oil and Gas Australia Ltd are Alpha Prospects plc, Derlite Limited, Hong Kong and Empire Energy International Corp Inc, USA.

 


 

Victoria

 

In the Gippsland Basin, Lakes has applied for a suspension and extension on VIC/P 43(V) and VIC/P 44(V) due to the difficulty of accessing these areas from onshore whilst the onshore exploration ban is still in place.

 


 

Western Australia

 

In the Petrel Sub Basin, cash bid areas W 15-1 and W 15-12 closed on 04/02/2016.  No cash bids were received and the areas revert to vacant acreage.

 

In the Dampier Basin, cash bid area W 15-10 closed on 04/02/2016.  No cash bids was received and the area reverts to vacant acreage.

 

In the Carnarvon Basin, cash bid area W 15-11 closed on 04/02/2016.  No cash bids was received and the area reverts to vacant acreage.

 

In the Dampier Basin, cash bid area W 15-9 closed on 04/02/2016.  One cash bid was received and is under consideration.

 

In the Dampier Basin, WA-1-P is being renewed.

 

In the Browse Basin, the Crown location and the Lasseter location applications were lodged for WA-274-P on 29/01/2016.

 

In the Petrel Sub Basin, the year 5 work program of WA-313-P has been extended by 3 months from 16/12/2015 to 15/03/2016. The licence has had its expiry date extended to 15/03/2016.

 

In the Carnarvon Basin, WA-360-P was relinquished on 29/01/2016 and WA-361-P expired on 30/01/2016. The areas revert to vacant acreage.

 

In the Carnarvon Basin, the year 3 work program of WA-362-P has been extended by 12 months from 23/02/2016 to 22/02/2017. The licence has had its expiry date extended to 22/02/2019. A change to the work program has been approved –


Year 3
: studies, 877 km 2D seismic reprocessing, update 3D petroleum system model $1.23m

 

In the Carnarvon Basin, the year 3 work program of WA-363-P has been extended by 12 months from 23/02/2016 to 22/02/2017. The licence has had its expiry date extended to 22/02/2019. A change to the work program has been approved –

 

Year 3: studies, 1147 km 2D seismic reprocessing, update 3D petroleum system mode $1.19m

 

In the Petrel Sub Basin, the year 4 work program of WA-454-P has been extended by 3 months from 09/12/2015 to 08/03/2016.

 

In the Carnarvon Basin, the year 3 work program of WA-483-P has been extended by 18 months from 09/05/2016 to 08/11/2017. The licence has had its expiry date extended to 08/11/2020.

 

In the Rowley Sub Basin, a suspension and extension for WA-487-P was lodged on 09/02/2016.

 

In the Carnarvon Basin, a change to the work program of WA-518-P has been approved –

Years 1-3: 885 sq km 3D seismic purchase & reprocessing, 885 sq km 3D pre-stack elastic inversion, well planning, G&G, 1 well $61.75m

 

In the Carnarvon Basin, a change to the work program of WA-519-P has been approved –

Years 1-3: 257 sq km 3D PSDM seismic reprocessing, 257 sq km 3D pre-stack elastic inversion, G&G $4.5m.

 

In the Carnarvon Basin, WA-57-L and WA-58-L were granted on 03/02/2016 for indefinite terms. Lady Nora Gas Interests are Woodside Energy Ltd 15.784%, Shell Australia P/L 15.784%, BHP Billiton Petroleum (Northwest Shelf) P/L 15.783%, BP Developments Australia P/L 15.783%, Chevron Australia P/L 15.783%, Japan Australia LNG (MIMI) P/L 15.783% and CNOOC NWS Pte Ltd 5.3%. Lady Nora Oil Interests are Woodside Energy Ltd 16.667%, Shell Australia P/L 16.667%, BHP Billiton Petroleum (Northwest Shelf) P/L 16.666%, BP Developments Australia P/L 16.667%, Chevron Australia P/L 16.667% and Japan Australia LNG (MIMI) P/L 16.666%.

 

In the Bonaparte Basin, WA-69-R was granted to Eni Australian BV 100% on 25/01/2016. The licence will expire on 24/01/2021. Work program is as follows –

Years 1-5: gas marketing, integrated reservoir modelling and other technical studies, concept engineering studies $0.25m.

 

In the Canning Basin, EP 390 expired on 30/01/2016. The area reverts to vacant acreage.

 

In the Canning Basin, as part of the work program variation application for EP 448, Key has also applied to have 20% of the block relinquished.

 

In the Perth Basin, EP 455 has been renewed to 17/01/2021 over a reduced area of 297 sq km. Work program is as follows –

Year 1: G&G studies, 150 km 2D seismic $0.15m
Year 2: G&G studies $0.1m
Year 3: G&G studies $0.1m
Year 4: G&G studies $0.1m
Year 5: 1 exploration well $5m

 

In the Canning Basin, EP 464 and EP 486 are being relinquished.

 

In the Canning Basin, Rey Lennard Shelf P/L has commenced legal proceedings against Oil Basins Ltd seeking that Oil Basins resign as operator of EP 487 and Rey be appointed in accordance with the terms of the joint operating agreement. Rey also refutes claims by Oil Basins that the company is in default under the terms of the joint operating agreement. A change to the work program has been approved –

Year 1: 140 km 2D seismic reprocessing $1m
Year 2: 2 wells $12.5m

 

In the Officer Basin, Mosman Oil & Gas is withdrawing from application STP-EPA-71.

 

In the Carnarvon Basin, Carnarvon Petroleum Ltd has secured a 35% interest in TR/3, WA-155-P (1) and WA-486-P from Quadrant Energy.  Carnarvon Petroleum will pay a 35% share of the cost to drill the Outtrim East 1 well, estimated to be approximately $10 million plus a modest consideration to Quadrant to enter the project. Quadrant will reduce to 65% equity and continue to act as operator.

 

In the Carnarvon Basin, INPEX Alpha Ltd has reached agreement with Carnarvon Petroleum Ltd for the sale of all of its participating interest 28.5% in WA-155-P (1).

 


 

New Zealand

 

In the West Coast Basin, Ocean Harvest International Ltd has applied for APP 60143 over 21.4 sq km.

 

In the Taranaki Basin, PEP 381203 and PEP 38748 are being relinquished.

 

In the East Coast Basin, PEP 38349 is being relinquished.

 

In the Taranaki Basin, MEO has exercised its right to assume operatorship of PEP 51153 after liquidators were appointed to Kea Petroleum. MEO’s appointment is subject to regulatory approval. MEO’s stake in the permit will stay at 30%.

 

In the Taranaki Basin, the STEP Acquisition relating to PMP 38151 and PMP 38155 no longer meets Mosman’s investment criteria at current oil and gas prices. The sale and purchase agreement has been cancelled. Origin has agreed to repay the deposit of NZD $500,000. The joint venture arrangement with High Peak Royalties Ltd and the Ridge Royalty Ltd agreement will also be terminated.

 


 

Papua New Guinea

 

In the Papuan Basin, Oil Search has farmed out 35% of PPL 339 to Total E&P PNG Ltd following Total's commitment to drill the Kalangar 1 well.

 

Also in the Papuan Basin, Cott Oil & Gas Ltd has reached a binding sales and purchase agreement with Twinza Oil (PDA) Ltd for the sale of its 40% interest in PRL 38.  The deal will be implemented either by the sale of 100% of the shares in Cott PNG to Twinza, or by the transfer of Cott’s 40% interest.  Under the sales and purchase agreement, Twinza will pay a total consideration of A$8m cash to be paid as follows:  A$2m on shareholder approval of the disposal, A$2m to be paid on 30/06/2016 and final payment of A$4m to be paid on 31/12/2016.

 


 

Timor Leste

 

TL-SO-15-01 was granted to Timor Gap Offshore Block Unipessoal Ltd 100%.  Grant and expiry dates have yet to be verified.

 

 

                                                                                                                                   

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