January 2017 GPinfo Update


Proposed Gazettal Areas

 

The 2017 Offshore Petroleum Exploration Acreage Release area nomination and shortlisting processes are now complete. There were 97 area nominations from 21 companies, which is similar to previous years

 

Industry Summary

 

Fitzroy River Corporation Ltd is pleased to announce a recommended off-market takeover offer to acquire Royalco Resources Ltd. The offer is 20 cents cash for each Royalco share

 

Santos has advised that the Muruk 1 exploration well in PPL 402 Papua New Guinea has reached total depth of 3130 metres. Following wireline logs, the preliminary interpretation is that the well has

 

Permit Updates and Changes

 

Santos has agreed to sell its 50% interest in Mereenie oil and gas field permits OL4 and OL5 to Macquarie Mereenie P/L, a subsidiary of Macquarie Group Ltd, with effect from 01/01/2017 …

 

WA-76-R was granted to Chevron Australia (WA-444-P) P/L 50%, Mobil Australia Resources Company P/L 25% and Shell Australia P/L 25% on 22/12/2016. The licence will expire on 21/12/2021

 

 

2017 Offshore Petroleum Exploration Acreage Release – Proposed Areas

 

The 2017 Offshore Petroleum Exploration Acreage Release area nomination and shortlisting processes are now complete. There were 97 area nominations from 21 companies received, which is similar to previous years. There are 22 areas proposed for inclusion in the 2017 acreage release. The proposed areas and associated boundaries are yet to be finalised and remain subject to change until the 2017 acreage is officially launched.

 

It is anticipated that the Minister for Resources and Northern Australia, Senator the Hon Matt Canavan, will announce the final 2017 acreage release at the annual Australian Petroleum Production and Exploration Association Conference in Perth, Western Australia on 15 May 2017.

Permit

Basin

Area (sq km)

AC17-1

Ashmore Platform

1,262

AC17-2

Vulcan Sub

168

AC17-3

Bonaparte

588

AC17-4

Browse

503

AC17-5

Browse

3,532

NT17-1

Bonaparte

8,391

NT17-2

Petrel Sub

7,234

T17-1

Bass

10,638

T17-2

Bass

5,282

V17-1

Gippsland

270

V17-2

Otway

235

V17-3

Otway

182

W17-1

Petrel Sub

2,848

W17-2

Petrel Sub

905

W17-3

Browse

2,732

W17-4

Rowley Sub

6,391

W17-5

Dampier

324

W17-6

Carnarvon

161

W17-7

Carnarvon

1,622

W17-8

Carnarvon

10,907

W17-9

Carnarvon

24,567

W17-10

Perth

24,476

 

Click here for more information.

 


 

2017 New Zealand Block Offer – Proposed Areas

 

The Minister of Energy and Resources, Hon Simon Bridges, has opened consultation with iwi and hapū on Block Offer 2017. Consultation with local authorities began on 17/10/2016.

 

Consultation will take place on two proposed onshore block areas, one proposed onshore/nearshore block area and four proposed offshore block areas covering a total area of around 508,691 square kilometres. Once consultation is complete, New Zealand Petroleum and Minerals will provide advice to the Minister who will decide the final blocks to be released for tender in March. Bids are accepted for a single 62.5 sq km block or for several contiguous blocks up to certain maximums.

 

Permit

Basin

Area (sq km)

17GSC-R1

Great South

210,587

17NRN-R1

Northland

162,466

17PEC-R1

Pegasus

75,791

17SLD-R1

Southland

4,360

17TAR-R1

Taranaki

65,008

17TAR-R2

Taranaki

1,495

17TAR-R3

Taranaki

1,474

 

Click here for more information.

 

 

Industry Summary                                       

 

Company News

 

Fitzroy River Corporation Ltd is pleased to announce a recommended off-market takeover offer to acquire Royalco Resources Ltd. The offer is 20 cents cash for each Royalco share and values Royalco at approximately $10.54 million. The offer is recommended by the board of Royalco in the absence of a superior proposal. (Source: Fitzroy River Corporation announcement, 14/12/2016).

 

Cooper Energy announces the signing of a binding gas sales agreement with EnergyAustralia for the supply of 5 PJ per annum from the Sole gas field for a minimum of 5 years, with provision for a 3-year extension subject to the parties’ agreement.  The agreement is conditional upon completion of the transaction for Cooper Energy to acquire Santos’ Victorian gas assets announced 24/10/2016 and an affirmative final investment decision for Sole. The agreement with EnergyAustralia is the fourth gas sales agreement for Sole and takes Cooper's committed production to 14.6 PJ per annum of the 25 PJ annual production anticipated from the field for the first 8 years. (Source: Cooper Energy announcement, 14/12/2016).

 

Shareholders in Rawson Resources Ltd have approved a name change to Rawson Oil and Gas Ltd at the annual general meeting on 02/12/2016. (Source: Rawson Oil & Gas announcement, 16/12/2016).

 

The transaction committee reviewing ExxonMobil’s takeover offer for InterOil has unanimously recommended the deal go ahead over the objections of Phil Mulacek, but it has negotiated an increased price. A new date for shareholders has been set for 10/01/2017, with a fresh vote to be held in mid-February, with the expectation the merger will be finalised by 31/03/2017, assuming Mulacek abandons further legal action. Under the terms of the amended agreement, ExxonMobil will still pay $US45 per share and make a further contingent resource payment (CRP) based on drilling of the Antelope 7 well. The terms of the CRP have been and will now be set at $7.07 per tcf equivalent of gross resource certified for the Elk-Antelope field above 6.2 tcfe, up to a cap that has been increased from 10 tcfe to 11 tcfe. That represents a total potential consideration increase to $78.94 per InterOil share, up from $71.87 per share. (Source: InterOil announcement, 15/12/2016, Energy News, 20/12/2016).

  

Armour Energy Ltd has executed a gas sales agreement with Australia Pacific LNG Group for the supply of 1.8 PJ of gas from Armour’s Kincora Roma Shelf gas project to APLNG’s LNG plant on Curtis Island over a minimum of 5 years. The deal provides cash flow certainty for the first 5 years as well as providing another secure source of gas for APLNG. Armour has retained the right to supply the broader gas market, including industrial companies, wholesale customers, and traders and other LNG producers after the commitments to APLNG have been met. Kincora phase 1 is expected to produce up to 3.3 PJ per annum, initially from the Newstead storage facility and then various wells across the fields that were last in operation. Phase 2, which is expected to begin in the second half of 2017, should see new wells, workovers and stimulations doubling production up to 20 TJ per day, about 80% of plant capacity. (Source: Armour Energy announcement, 22/12/2016).

 

Origin Energy has signed an LNG sale and purchase agreement with ENN LNG Trading Company Ltd for the delivery of LNG to China for up to 10 years. The contract builds on a heads of agreement agreed to with Origin in March 2016, and will see Origin supply 280,000 tonnes per annum of LNG for an initial five years, with an option to extend that to 10 years. Deliveries of LNG under the SPA are expected to begin in 2018 or 2019. While it is expected that Origin will supply the gas from its Australia Pacific LNG plant, the agreement provides Origin with the flexibility to supply from its portfolio. (Source: Origin Energy announcement, 21/12/2016, Energy News, 22/12/2016).

 

BP has decided to formally withdraw its environmental plan for drilling in the Great Australian Bight. BP attributed its decision in the face of public protests and a senate inquiry to its preference for less risky, shorter cycle investments. Yesterday, BP wrote to the regulator withdrawing both of its environment plan submissions from review, a move that would imply that Statoil is unlikely to find a replacement partner in time to meet the permit work commitments. NOPSEMA had rejected BP's wider plans for drilling several times and was yet to make an initial call on plans for Stromlo 1 and Whinham 1. (Source: Energy News, 22/12/2016).

 

AWE, operator of the Waitsia gas project, reports that Stage 1A of the Waitsia gas project has exceeded pre-production expectation over the first three months. Prior to production, the expectation was the Senecio 3 and Waitsia 1 wells would be connected to between 34 bcf and 112 bcf of gas-in-place (GIP), results from the wells to date suggest connection to between 95-130 bcf GIP, and that does not include testing of the estimated 50-60 bcf GIP in the Waitsia 1 Kingia formation. (Source: Energy News, 23/12/2016).

 


 

Developments

 

Shell’s Queensland Curtis LNG has passed a significant milestone, dispatching its 200th cargo of CSG as LNG this week. The cargo was loaded on the tanker Gaslog Gibraltar, which departed Gladstone yesterday. Shell's vice president QGC Tony Nunan said the company was proud that its project was able to make such a significant contribution to Queensland's regional economy. The record cargo came just one year after lead contractor Bechtel handed over operational control of the plant to mark the transition from construction to permanent operations and a seven-year planning and development timeline. (Source: Energy News Bulletin, 16/12/2016).

  

Technip has been awarded an engineering and project management services contract by Shell Australia. This contract will provide multi-disciplinary engineering and design services in support of the Prelude FLNG project, and will allow the smooth delivery of brownfield engineering scope as the project moves into operations. Under the contract, Technip will provide a comprehensive suite of services, including detailed and follow-on engineering services; procurement; pre-commissioning, commissioning and hand-over services; operational testing; portfolio management services and document management and control, all supporting Shell's operations team. Technip’s operating centre in Perth, Western Australia will lead, manage and deliver the contracted work, providing local expertise for a local solution. (Source: Energy News Bulletin, 16/12/2016).


DUET subsidiary DBP Development Group has announced plans to develop Western Australia’s largest gas storage facility. DBP has resurrected old BHP Billiton plans to redevelop the depleted Tubridgi gas field as a 42 PJ storage facility that will be able to supply around 50 TJ per day to customers in the Pilbara region. China's CITIC will be the foundation customer under a 10-year gas storage agreement with options for a further five years, additional contracts with other customers are being negotiated. The development is expected to cost about $69 million, to be funded by $38 million of DUET's corporate working capital and the balance from DDG's bank debt facility. Works should be complete by June 2017. (Source: DBP Development Group announcement, 19/12/2016, Energy News, 20/12/2016).

 

Armour Energy has started outlining its firm plans to boost production from its Kincora gas plant on Queensland’s Roma Shelf into 2017. Its first step in the gas phase will be to ramp production up to 9 TJ per day at Kincora, with production initially from the gas stored in the Newstead storage facility, and then various wells across the fields will be pressed back into service. First gas production is targeted by mid Q1 2017, and the balance if the restart (including associated liquids) to be completed by the end of Q2 2017. Phase 2 will involve the drilling of new wells plus workovers and stimulations of existing wells to achieve a ramp up of gas production to 20 TJ per day over a period of 12 to 18 months from first gas production. (Source: Armour Energy announcement, 19/12/2016).

 

Australia and Timor Leste have jointly announced an agreement to abandon the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS). The treaty sets out the division of revenue from the Greater Sunrise oil and gas fields, worth an estimated $40 billion. A joint statement from both countries said the Treaty on CMATS would no longer apply, after a three-month transition period. This is expected to enable negotiations to take place to establish a permanent marine border between the two countries, a process that the 2006 treaty had put aside for 50 years. This week’s joint agreement to scrap the 2006 treaty did not set a timetable or deadline for the establishment of the permanent boundary. Even so, Woodside has welcomed the commitment to negotiation as a positive move towards commercialisation of the Greater Sunrise fields. (Source: Oil & Gas Journal, 10/01/2017, ABC Online, 10/01/2017).


 

Discoveries

 

Santos has advised that the Muruk 1 exploration well in PPL 402 Papua New Guinea has reached total depth of 3130 metres. Following wireline logs, the preliminary interpretation is that the well has encountered gas and condensate within the primary target Toro Formation, and results are in line with pre-drill expectations. The joint venture is now considering drilling the Muruk 1/ST1 well to down dip to the north east, to attempt to delineate the hydrocarbon-water contact within the Toro Formation. (Source: Santos announcement, 28/12/2016).

 

Cooper Energy and operator Senex Energy have had success at the Worrior 11 development well in PPL 207. The well has been cased and suspended after reaching a total depth of 1669 metres in the Hutton Sandstone.  A 5.2 metre net oil column is interpreted in the primary target lower Birkhead Formation/Hutton Sandstone interval. A further 3.9 metres of net oil was seen in the mid-Birkhead Formation and 2.2 metres of net oil in the secondary target McKinlay Member. (Source: Cooper Energy announcement, 04/01/2017).

 

Quadrant Energy Ltd and Carnarvon Petroleum Ltd have reported success at its Phoenix South 2 appraisal well in Bedout sub-basin permit WA-435-P. The well has encountered a 39 metre thick hydrocarbon-bearing zone with significant gas influx and elevated reservoir pore pressure at or near the Caley formation primary target. The well was unable to assess up to 185 metre thickness of additional potential hydrocarbon-bearing Caley reservoir below 5215 metre depth because of the higher than anticipated pressures. Encouragingly, higher formation pressures typically support larger volumes and higher gas and condensate flow rates over a given reservoir. The joint venture will now assess the results to determine an appropriate forward strategy to assess the Caley reservoir. (Source: Carnarvon Petroleum announcement, 19/12/2016).

 

Appraisal drilling at Canunda has revealed a new field that appears to be separate from the Canunda discovery on the western flank of the Cooper Basin. Beach Energy, drilled Canunda 3, the first of three appraisal wells, on the western end of the Patchawarra Trough, targeting liquidsrich gas within a stratigraphic trap in the Patchawarra Formation. The well reached a total depth of 2811 metres on 31/12/2016, and in the days since wireline logging has indicated 1.6 metres of net pay in the primary target, which flowed at 1.9 mmcfd on a drill stem test. A further test of a 1.2 metre-thick secondary Patchawarra target flowed at 1.3 mmcfd. The well has been cased and suspended for further testing. Beach said analysis of test results was expected to confirm that the primary and secondary targets of Canunda 3 represent new discoveries that are not connected to existing reservoirs within the Canunda wet-gas field. (Source: Beach Energy announcement, 11/01/2017).

 Permit Changes                                                                

 

Northern Territory

 

Amadeus Basin

Santos has agreed to sell its 50% interest in Mereenie oil and gas field permits OL4 and OL5 to Macquarie Mereenie P/L, a subsidiary of Macquarie Group Ltd, with effect from 01/01/2017. Central holds the other 50% of the Mereenie assets and remains operator.

McArthur Basin

Santos is caught up in a dispute with Tamboran Resources centring around the fulfilment of requirements committed to by Santos when it entered into a joint venture with Tamboran in 2012 involving three permits in the McArthur Basin, EP161, EP 162 and EP189. A decision is expected in June.

Vulcan Sub Basin

A suspension and extension for AC/P21 was lodged with NOPTA on 04/01/2016.

Queensland

 

Eromanga Basin

Preferred tenderers have been announced for the PLR 2015-2 gazettal which closed on 08/10/2015.  Preferred tenderer for PLR2015-2-10, PLR2015-2-17 and PLR2015-2-18 is Bridgeport Energy Ltd.  Preferred tenderer for PLR2015-2-16 and PLR2015-2-19 is Metgasco Ltd. Preferred tenders were not awarded for the remaining licences which revert to vacant acreage.

 

ATP 299 expired on 31/12/2016 and now reverts to vacant acreage.

Galilee Basin

ATP 1015 has undergone a partial relinquishment and now covers a reduced area of 1322 sq km.

 

ATP 529 was renewed on 28/11/2016 as ATP 2019. The licence will expire on 30/11/2020.

Surat/Bowen Basin

Stuart Petroleum Cooper Basin Gas P/L 100% has applied for three new production licences over the Lacerta field:  PL 1022 (231 sq km), PL 1023 (231 sq km) and PL 1024 (225 sq km).

South Australia

 

Arckaringa Basin

PEL 117 has been suspended from 13/02/2017 to 12/08/2017. The licence has had its expiry date extended to 03/04/2019.

 

PEL 118 and PEL 119 have been suspended from 31/01/2017 to 30/07/2017. The licenses have had their expiry dates extended to 31/12/2020.

 

PEL 121 and PEL 122 have been suspended from 16/02/2017 to 15/08/2017. The licenses have had their expiry dates extended to 03/04/2019.

 

PEL 123 has been suspended from 14/04/2017 to 13/10/2017. The licence has had its expiry date extended to 04/10/2022.

 

PEL 124 has been suspended from 14/04/2017 to 13/10/2017. The licence has had its expiry date extended to 05/10/2022.

Cooper Basin

Retention leases have been granted over the entire area of PEL 100.

 

PPL 78, PPL 79, PPL 80 and PPL 83 are being renewed.

 

PRL 207 was granted to Stuart Petroleum P/L 50%, Santos QNT P/L 25.835%, Cooper Energy Ltd 19.165% and Victoria Oil Exploration (1977) P/L 5% on 07/12/2016. The licence will expire on 06/12/2021.

 

PRL 208 was granted to Stuart Petroleum P/L 50%, Santos QNT P/L 25.835%, Cooper Energy Ltd 19.165% and Victoria Oil Exploration (1977) P/L 5% on 07/12/2016. The licence will expire on 06/12/2021.

 

PRL 209 was granted to Stuart Petroleum P/L 50%, Santos QNT P/L 25.835%, Cooper Energy Ltd 19.165% and Victoria Oil Exploration (1977) P/L 5% on 07/12/2016. The licence will expire on 06/12/2021.

Eromanga Basin

PEL 568 and PEL 569 have been suspended from 31/01/2017 to 30/07/2017. The licenses have had their expiry date extended to 16/12/2019.

Officer Basin

Geothermal licence GEL 611 has been suspended from 01/12/2016 to 31/05/2017. The licence has had its expiry date extended to 23/07/2019.

St Vincent Basin

PEL 120 has been suspended from 16/02/2017 to 15/08/2017. The licence has had its expiry date extended to 03/10/2018.

Tasmania

 

Otway Basin

A variation on T/49P was lodged with NOPTA on 14/12/2016.

Victoria

 

Gippsland Basin

The VIC/P41 partners lodged a surrender application with NOPTA on 07/10/2016. The surrender has been offered by NOPTA.

 

Cooper Energy has completed the acquisition of 100% of VIC/L21 from Santos with the interest being held by Cooper Energy (PBF) P/L.

 

 

Cooper Energy has completed the acquisition of 50% of VIC/RL3 from Santos with the interest being held by Cooper Energy (Sole) P/L.  In addition, Cooper Energy Ltd will transfer the 50% interest it already holds in VIC/RL3 into Cooper Energy (Sole) P/L. Once finalised, Cooper Energy (Sole) P/L will hold 100% of the licence.

Otway Basin

Cooper Energy has completed the acquisition of 50% of VIC/P 44, VIC/L24, VIC/L30, VIC/RL11 and VIC/RL12 from Santos with the interests being held by Cooper Energy (CH) P/L.

 

A suspension and extension for VIC/P67 was lodged with NOPTA on 23/12/2016.

Western Australia

 

Barrow Sub Basin

The years 1-3 work program of WA-486-P have been suspended for 12 months to 14/11/2017. A change to the following years of the work program have been approved -

Years 1-3: 505 sq km 3D seismic, PSDM processing, geotechnical studies, 547 sq km 3D broadband PSDM reprocessing, rock physics/QI and 3D seismic inversion studies $11.3m

Year 4: geotechnical studies $0.2m
Year 6: 1 well $20m

 

Quadrant Northwest P/L has assigned Santos Offshore P/L a 45% participating interest in WA-510-P.

Bonaparte Basin

A change to the WA-454-P work program has been approved –

Year 6: geochemical & geotechnical studies $0.6m

Browse Basin

The year 3 and 4 work program conditions for WA-377-P have been suspended for 12 months to 22/09/2017. The licence has had its expiry date extended to 22/09/2018.

Canning Basin

The year 2 work program for EP 104 has been suspended by 6 months to 29/07/2017. The licence has had its expiry date extended to 29/07/2020.

 

EP 451 and EP 456 expired on 31/12/2016. The areas revert to vacant acreage.

 

EP 457 has been renewed to 05/01/2022 over a reduced area of 2531 sq km.

 

EP 458 has been renewed to 05/01/2022 over a reduced area of 2935 sq km.

Carnarvon Basin

WA-14-R has been renewed to 27/12/2021.

 

WA-15-R has been renewed to 27/12/2021.

 

WA-205-P is being renewed.

 

TR/3 is being renewed.

 

A suspension and extension for WA-362-P was lodged with NOPTA on 21/12/2016.

 

A suspension and extension for WA-363-P was lodged with NOPTA on 21/12/2016.

 

The area of WA-374-P has been reduced due to the grant of WA-77-R.

 

A suspension and extension for WA-418-P was lodged with NOPTA on 20/12/2016.

 

WA-42-R has been renewed to 21/12/2021.

 

Retention leases have been granted over the entire area of WA-444-P.

 

WA-76-R was granted to Chevron Australia (WA-444-P) P/L 50%, Mobil Australia Resources Company P/L 25% and Shell Australia P/L 25% on 22/12/2016. The licence will expire on 21/12/2021. Work program is as follows –

Year 1: seismic interpretation & static model updates $0.025m
Year 2: Chrysaor dynamic modelling updates $0.025m
Year 3: subsurface, engineering & technical studies $0.025m
Year 4: subsurface, engineering & technical studies $0.025m
Year 5: gas market/cost review $0.025m

 

WA-77-R was granted to Chevron Australia (WA-374-P) P/L 50%, Mobil Australia Resources Company P/L 25% and Shell Australia P/L 25% on 22/12/2016. The licence will expire on 21/12/2021. Work program is as follows –

Year 1: update seismic interpretation $0.03
Year 2: geologic & engineering studies $0.03
Year 3: commercial engagement with other permit resource owners $0.03
Year 4: gas supply optimisation & ullage timing studies $0.03
Year 5: identify & assess development concepts $0.03

Dampier Basin

WA-209-P is being renewed.

Officer Basin

EP 468 was cancelled on 23/12/2016. The area reverts to vacant acreage.

Perth Basin

The year 2 work program for EP 321 has been suspended by 12 months from 04/12/2016 to 04/12/2017. The licence has had its expiry date extended to 04/12/2020.

 

The year 3 work program for EP 413 has been suspended by 12 months from 22/02/2017 to 22/02/2018. The licence has had its expiry date extended to 22/02/2020.

 

EP 480 has undergone a partial relinquishment and now covers a reduced area of 969 sq km.

 

EP 492 was relinquished on 09/12/2016.

 

The farmout of TP/15 has been extended to 15/02/2017.

New Zealand

 

Great South Basin

16GSC-R1 was not offered.

Northland Basin

16NRN-R1 was not offered.

Pegasus Basin

16PEC-R1 was not offered.

 

Chevron New Zealand Exploration Ltd has transferred its 50% interest in PEP 57085 to Chevron New Zealand Exploration III Ltd.

 

Chevron New Zealand Exploration Ltd has transferred its 50% interest in PEP 57087 to Chevron New Zealand Exploration II Ltd.

Taranaki Basin

16TAR-R1 was not offered.

 

Part of 16TAR-R2 was granted as PEP 60273 to Todd Exploration Management Services Ltd 100% on 15/12/2016. The licence will expire on 14/12/2026. Work program is as follows –

12 months: 5 sq km 3D seismic
24 months: 180 km 2D seismic reprocessing
42 months: 1 well
72 months: 40 km 2D seismic
84 months: 1 well

 

The sale of New Zealand Oil & Gas’ 15% interest in the Kupe gas field PML 38146 was completed on 01/01/2017. New Zealand Oil & Gas received $168 million from Genesis Energy in the transaction, which was resoundingly approved at a special meeting of shareholders on 16/12/2016.

 

New Zealand Oil & Gas has received an offer from the purchaser, Tamarind, for its 27.5% interest in Tui PMP 38158. NZOG is reviewing the announced transaction and considering the offer.

West Coast Basin

A change to the PEP 38526 work program has been approved -

116 months: plug & abandon any wells drilled or re-entered
120 months: submit a prospectivity report

 

PEP 57067 is being relinquished.

 

                                                                                                                                  

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