Lidia Novosel, Cynthia Thomas and Rob Healy attended the APPEA Conference last month in Brisbane ...

 

Eastern Star Gas has taken the first step in commercialising its Narrabri CSG project, entering a memorandum of understanding with ERM Power for the supply of gas to a 600-megawatt power station approved for development at Wellington, NSW ...

 

In the Clarence-Moreton Basin, PEL 426 was renewed until 19/02/2014 over a reduced area of 2,838 sq km ...
 


APPEA 2010

Lidia Novosel, Cynthia Thomas and Rob Healy attended the APPEA Conference last month in Brisbane.  Thanks to all those who took the time to drop by our booth to say hello.

As has become a tradition in recent years, we again ran the GPinfo Brainteaser competition.  Contestants have to answer 10 multiple choice questions on the Australasian oil and gas industry.  Of course, using GPinfo to help answer the questions is the general idea.  The winner of the first prize of a Kindle Wireless Reading Device was Hamish Allan from the Commonwealth Bank while the runner up was Shane Westlake from Finder Exploration who scored a USB TV tuner.



Finder's Shane Westlake and Hamish Allan from the Commonwealth Bank
receive their prizes from PBBI's Rob Healy.

The conference also saw the release of the 2010 editions of the Petroleum Permits of Australasia Map and Book which are now available by mail order from our Sydney office.  Please click here to download the order form.


Industry Summary

Company News

Eastern Star Gas has taken the first step in commercialising its Narrabri CSG project, entering a memorandum of understanding with ERM Power for the supply of gas to a 600-megawatt power station approved for development at Wellington, New South Wales. Under the MoU, ESG will supply 20 petajoules of gas per year over a 20-year contract period. The gas supply arrangement is estimated to deliver revenues of more than $1.6 billion based on industry predictions of electricity prices. The agreement is expected to be finalised by the end of the year in order to allow the parties to put financing arrangements in place with a view to making final project development commitments by mid-2011. First gas delivery to the Wellington power station is expected around mid-2013. (Source: www.petroleumnews.net, 17/05/2010).

Eastern Corporation has secured 100% of Galilee Energy after receiving acceptances from all minority Galilee shareholders. Eastern held 68% of Galilee and made an offer to buy out the minority shareholders earlier this year by offering one Eastern share for every seven Galilee shares. Eastern believes the buyout will add value for all shareholders by allowing the company to efficiently realise the value of Galilee’s coal seam gas assets under a simplified ownership structure. Following the takeover, Eastern Corporation Ltd changed its name to Galilee Energy Ltd and began trading under its new name and new ASX code GLL on 04/06/2010. (Source: www.petroleumnews.net, 02/06/2010, ASX release, 04/06/2010).

AWE subsidiary Arc Energy disagrees with Adelphi Energy’s target statement, saying its all-cash 40c per share bid is a compelling offer for Adelphi shareholders. While Adelphi dismissed Arc’s offer as being neither fair nor reasonable, Arc said a number of points in the target statement actually supported its offer. It noted that its offer was an 80% premium to the 22c low case value of Adelphi in the independent expert’s report, adding that the range presented was not sufficiently risked as it treated Adelphi’s resource in the Sugarloaf assets as if they were reserves. Arc also said that Adelphi needed additional funding for more than 200 wells over time with Adelphi’s share of costs for the next 30 wells over two to three years expected to be about $US21 million ($A25.17 million). It said Adelphi only had sufficient funds for the next nine months and would need to raise additional capital from existing investors or by diluting their interests. (Source: www.petroleumnews.net, 02/06/2010).

Arrow Energy’s proposed spin-off Dart Energy may seek to raise around $75 million after listing on the Australian Securities Exchange to provide working capital for its projects. Speaking at a webcast on 07/06/2010, Arrow chief financial officer Graham Yerbury said the company would look to raise $25-30 million through a placement once listed on the ASX with further capital raisings down the track. Earlier this year, Arrow accepted Shell and PetroChina’s $3.4 billion takeover bid which will result in Arrow investors receiving $4.70 per share plus one share in a new company, Dart Energy. Dart Energy will hold stakes in Australia-listed companies Apollo Gas, Bow Energy and Liquefied Natural Gas Ltd as well as a 90% interest in Arrow International, which holds the existing portfolio of international assets in China, India, Vietnam and Indonesia. (Source: www.petroleumnews.net, 02/06/2010).

 

Development News

Eni Australia has awarded a subsea contract to Technip for its Kitan field development in the Joint Petroleum Development Area permit JPDA 06-105 between Timor Leste and Australia. Technip will provide project management and engineering as well as the supply and installation of 23 km of flowlines and risers. It will also install the umbilical system. Technip will operate the program from its Perth office. The pipelines will be manufactured in the company’s plant in France. Offshore installation is scheduled to begin during the first-half 2011 using Technip’s Venturer construction vessel. Kitan is to be developed using three subsea wells connected to the Glas Dowr floating production, storage, and offloading vessel. First production is expected during second-half 2011. (Source: Oil & Gas Journal www.ogj.com, 24/05/2010).

Apache Corp has started work toward development of the Julimar complex of natural gas-condensate fields in the Carnarvon basin off Western Australia. The Houston independent let a front-end engineering and design contract to JP Kenny for the subsea development of Julimar, Brunello and Grange fields. The fields, with combined reserves estimated at 2.1 tcf of gas, lie in 250 m of water 80 km north-northwest of Varanus Island. The contract covers as many as 18 subsea wells and completions tied back to the Wheatstone Central Processing Platform, which Chevron Corp. will build to the northeast as part of a production and LNG scheme under development. JP Kenny’s work for Apache will include subsea systems and 90 km of flowlines. The firm expects to complete the first phase of its contract work in October and a second phase in June 2011. (Source: Oil & Gas Journal www.ogj.com, 20/05/2010).

NEW Zealand’s Contact Energy has completed its new $NZ100 million ($A81.3 million) Te Huka geothermal power station near Taupo three weeks ahead of schedule. Contact managing director David Baldwin said the 23-megawatt binary plant, which is capable of supplying electricity to about 23,000 homes, was also under budget. Tauhara One is the first project in Contact’s current $NZ600 million investment program to be completed. Contact is seeking consents for its 250MW Tauhara Two geothermal power station through a board of inquiry process, and is also advancing development of its already consented 220MW Te Mihi power station nearby. The company also expects exploration drilling of the Taheke geothermal resource to start shortly, in conjunction with its Maori joint venture partner, the Taheke 8C Incorporation. In addition, Contact will also later this year officially open the $NZ250 million 200MW fast-start gas-fired peaker plant at Stratford in Taranaki, and the nearby associated $NZ250 million Ahuroa gas storage facility. (Source: www.petroleumnews.net, 25/05/2010).

Australia Pacific LNG’s Gladstone project centre was officially opened on 26/05/2010 by QLD Premier, the Hon. Anna Bligh. The Premier was joined by Origin Managing Director Grant King and ConocoPhillips President and Chief Operating Officer John Carrig at the official opening of the centre. The centre has a dual purpose, as an office for Project employees, as well as being an education centre for the Gladstone section of the Australia Pacific LNG project. The CSG to LNG project is a 50:50 joint venture between Origin and ConocoPhillips. The project will stretch from the gas fields in the Surat and Bowen Basins, along a 450 km pipeline, to an LNG facility on Curtis Island off Gladstone. (Source: Origin Energy ASX announcement, 26/05/2010).

Santos and Petronas’ $7.7 billion Gladstone Liquefied Natural Gas Project has moved a step closer to a final investment decision after receiving conditional environmental approval from the Queensland government. Independent Coordinator-General Colin Jensen approved the project on 28/05/2010 with strict conditions following the review of the project’s 13,500-page environmental impact statement. The approval covers the development of Coal Seam Gas resources in the Bowen and Surat basins around Roma by drilling 2650 wells over 25 years; construction of a 435km pipeline from the gas fields to the coast; and construction of up to three processing trains at an LNG plant and export facility on Curtis Island. (Source: www.petroleumnews.net, 28/05/2010).

Metgasco has received approval from the New South Wales Department of Planning for the development of the 30-megawatt Richmond Valley gas-fired power station. The power station will use about 2.3 petajoules of gas per year from the Casino gas project, which will include Metgasco’s recently discovered Kingfisher conventional gas field as well as coal seam gas. Metgasco has 397PJ of proved and probable reserves in PEL 16, enough to supply the power station for more than 150 years, well beyond its expected life. (Source: www.petroleumnews.net, 10/06/2010).

Discoveries

Karoon Gas’ Kronos 1 well in the Browse Basin has flowed gas at a rate of 26 million standard cubic feet per day, with shares gaining 81c to reach a high of $8.48 on 19/05/2010. Karoon and WA-398-P joint venture partner ConocoPhillips are conducting a drill stem test on the exploration well, which was perforated over the interval 4999-5052m in the Plover Formation reservoir. Karoon said the flow rate had been constrained by current surface equipment configuration. The production test will continue for about seven days and will include shut-in and flowing periods, surface sampling of reservoir fluids, possible bottom-hole production logging and reservoir fluid sampling. (Source: www.petroleumnews.net, 20/05/2010).

Comet Ridge says it’s likely a pilot production scheme will be carried out in the central permit area of ATP 744P, Galilee Basin, after the Hergenrother 1 well encountered a significant section of coal and shale. Hergenrother 1 was drilled to test the primary objective Betts Creek Coal Measure sequences in the central area of ATP 744P. The well reached a depth of 929m and intersected 16m of coal and 12m of shale with encouraging preliminary gas content. Source: www.petroleumnews.net, 07/06/2010).

Victoria Petroleum is expected to start testing the Fury 1 discovery well in PEL 115 of the Cooper Basin following months of weather-related delays. Partner Monitor Energy said the Easternwell Rig 4 is expected to arrive on location following the completion of repairs to roads leading to the well site. For several months, roads in the Cooper Basin have been submerged in flood waters caused by abnormally high rains. The testing program on Fury-1, which confirmed a 17m oil column in the target Murta Formation, will involve testing the Murta Formation on clean-up to determine a flow rate. Following clean-up operations, a 10-day test under pump will determine the well productivity using a test tank and temporary truck-loading facility. If the 10-day testing program in successful, the well will be placed on an extended production test. Fury-1 has a mean resource of 7.99 million barrels, according to a report commissioned from MBA Petroleum Consultants to help evaluate reserves for the greater Fury area. (Source: www.petroleumnews.net, 08/06/2010).


Permit Updates and Changes

New South Wales

In the Clarence-Moreton Basin, PEL 426 was renewed until 19/02/2014 over a reduced area of 2,838 sq km.

In the Surat Bowen Basin, PEL 6 was renewed until 18/12/2011.

In the Surat Basin, PEL 437 is being renewed.

In the Sydney Basin, PELA 112 was granted as PEL 483 to East Coast Power P/L (ACN 119 110 057) on 06/05/2010. The licence was granted with the reduction in area and now covers 3,086 sq km. The licence will expire on 06/05/2012.

Also in the Sydney Basin, application PELA 131 was cancelled.

In the Darling Basin, PSPA 32 expired on 04/06/2010.

In the Sydney Basin, PEP 11 has had its expiry date extended to 03/10/2011.

PELA 132 is a new application in the Murray basin by Energetica Resources P/L.

PSPAPP 51 and PSPAPP 52 are two new applications in the Clarence-Moreton Basin by Macquarie Energy P/L.  They overlap existing permit PEL 445.

Geothermal Permits

In the Clarence-Moreton Basin, Geothermal Permits EL 7205 and EL 7367 were cancelled by permit holder.

Also in the Clarence-Moreton Basin, Geothermal Permit Application ELA 3326 was withdrawn.


 

Northern Territory

Offshore, in the Vulcan Basin, AC/P 22 was renewed until 27/05/2015.

Also in the Vulcan Basin, AC/P 38 was surrendered on 09/06/2010.

Also offshore, in the Timor Basin, AC/RL 4 and AC/RL 5 were renewed for 5 years and will now expire on 07/05/2015.

In the Pedirka Basin, EP 163 was granted for 5 years to Tamboran Resources P/L on 14/5/2010.

In the McArthur Basin, application EP(A) 158 by Black Gold Resources Ltd was refused on 27/05/2010 and EP(A) 157 was withdrawn on 02/06/2010.

Offshore, in the Bonaparte Basin, NT 09-Special gazettal was granted as NT/P 81 to Tangiers Petroleum Ltd (formerly DVM International Ltd) - 90% and Ansbachall P/L - 10%. The licence will expire on 12/05/2016.

Also in the Bonaparte Basin, gazettal NT 09-1 was granted as NT/P 82 to Magellan Petroleum (Offshore) P/L. The licence will expire on 12/05/2016.

Geothermal Permits

GEP 28120 is a new geothermal permit application in the Georgina Basin by Barkly Energy P/L.


 

Queensland

13 areas were made available in Queensland for the 2010 Onshore GHG Storage Acreage Release.  Applications for all areas closed on 15/06/2010.  See information layer Greenhouse Gas Storage Gazettals in GPinfo.              

QLR2010-1-1
,
QLR2010-1-2, QLR2010-1-3 and QLR2010-1-4 in the Adavale Basin
QLR2010-1-5 and QLR2010-1-6 in the Galilee Basin

QLR2010-1-7 in the Bowen Basin
QLR2010-1-8, QLR2010-1-9, QLR2010-1-10, QLR2010-1-11, QLR2010-1-12 and QLR2010-1-13 in the Surat Basin
                      

I
n the Galilee Basin, ATP 1032P was granted to Queensland Energy Resources Ltd. The licence will expire on 30/06/2022.  ATPs 1033P, 1034P, 1035P, 1036P and 1037P over the same area are cancelled.

I
n the Eromanga Basin, ATP 1056P was granted to Discovery Geo Corporation on 19/05/2010. The licence will expire on 31/05/2022. ATP 634P over the same area expired on grant of ATP 1056P.

In the Bowen Basin, Molopo (Queensland) LLC and Mitsui Moura Investment P/L have acquired Anglo Coal's interest in ATP 564P, PL 94 FO (North Block) and ATP 602P. The interest split now is as follows.

ATP 564P
and PL 94 FO (North Block)
Molopo (Queensland) LLC (operator) 33.56%; Lowell Petroleum 33.56%; Mitsui Moura Investment P/L 32.88%

ATP 602P
:
Molopo (Queensland) LLC (operator) 25%; Lowell Petroleum 37.88%; Mitsui Moura Investment P/L 37.12%
.

In the Eromanga Basin, Pancontinental Oil & Gas is farming in to earn 20% in ATP 587P by funding up to $500K of Irriculla 2 well cost and thereafter paying pro-rata 20%. The current estimated well cost is $1.5M.

In the Bowen and Galilee Basins, Mitsui E&P Australia P/L has until 31/10/2010 to exercise its option to acquire 49% of Westside's existing interest in ATP 688P, ATP 769P, ATP 974P and ATP 978P.  The farm-ins are conditional on completion of the Dawson CSG fields acquisition and Westside's JV partners in ATP 688P and ATP 769P waiving their pre-emptive rights.

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

Licence                        Basin                           Area (sq km)

ATP 787P                     Bowen                           2,656
ATP 788P                     Surat                                642
ATP 799P
                     Drummond                     3,108

In the Surat Bowen Basin,
Clark Oil and Gas has appointed Red Sky, through its 100% subsidiary, Cydonia Resources, to manage the farm-out of both conventional and CSG rights to ATP 840P. Red Sky will be seeking a farminee to earn a 50% interest in both conventional and CSG rights by funding a well and seismic. Should this occur, Red Sky (Cydonia Resources) will earn a 20% interest in the conventional rights whilst maintaining its 50% interest in CSG rights.

Geothermal Permits

EPG 19 was granted to Hot Rock Ltd on 14/05/2010. The licence will expire on 31/05/2015. Applications EPG 20, 21, 22 and 23 over the same area are unsuccessful and were cancelled.

 

In the Eromanga Basin, EPG 4 was granted to Red Hot Rocks P/L. The licence will expire on 31/05/2015.
 

 

South Australia

The following petroleum permits have had their expiry dates extended:

Licence                        Basin                       New Expiry Date 

PEL 88                         Cooper                          15/11/2013
PEL 90                         Cooper                          01/05/2013
PEL 91                         Cooper                          04/12/2013
PEL 92                         Cooper                          04/05/2012
PEL 94                         Cooper                          04/11/2012
PEL 95                         Cooper                          29/04/2012
PEL 100                        Cooper                         16/11/2013
PEL 104                        Cooper                          02/04/2014
PEL 105                        Cooper                          08/07/2011
PEL 107                        Cooper                          01/06/2014
PEL 111                        Cooper                         13/01/2011
PEL 113                        Cooper                         13/10/2013
PEL 115                        Cooper                         12/05/2014
PEL 154                        Otway                          31/12/2010
PEL 155                        Otway                          31/12/2010
PEL 182                        Cooper                         21/11/2012
PEL 218                        Cooper                         14/10/2013
PEL 424                        Eromanga                     07/07/2013

PEL 500                        Officer                          12/04/2014

In the Murray Basin, PEL 219 was surrendered on 02/06/2010.

In the Cooper Basin, PELA 516 was granted as PEL 516 to Stuart Petroleum, 100%. The licence was granted over reduced area of 2,568 sq km and will expire on 19/05/2015. Work Program is as follows –

Year 1: 4 wells, 300k seismic
Year 2
: 3 wells, 1000k seismic reprocessing
Year 3
: 2 wells
Year 4
: 2 wells
Year 5
: 2 wells

In the Cooper Basin, Blue Energy subsidiaries, Everdue P/L and Kompliment P/L, decided to withdraw from PEL 106 P (Paprika) and PEL 106 R (Rossco) blocks; their equity reverts to Great Australian Oil and Gas.

Also in the Cooper Basin, following the obligatory completion of Fury and Airacobra wells in PEL 115, Lion Petroleum and Komodo Energy have assumed the ownership of 25% and 42% respectively under farm-in agreement.

 

In the Cooper Basin, ADX Energy Ltd is selling its 49.9% interest in PEL 182 to Victoria Petroleum and Innamincka Petroleum is acquiring 37.6% from Strategic Energy Resources Ltd. The deals are subject to approval from SA Department of Primary Industries and Resources and other JV partners waiving their pre-emption rights.

Geothermal Permits

The following geothermal permits in the Cooper Basin have had their expiry dates extended:

Licence        New Expiry Date

GEL 220           23/01/2012
GEL 221           23/01/2012
GEL 267           22/05/2013
GEL 268           22/05/2013
GEL 269           22/05/2013
GEL 270           22/05/2013
GEL 271           22/05/2013
GEL 272           22/05/2013
GEL 273           22/05/2013
GEL 274           22/05/2013
GEL 275           22/05/2013
GEL 276           22/05/2013
GEL 277           22/05/2013

The following geothermal permits were surrendered:
 

Licence              Basin 

GEL 241
              Murray
GEL 242
              Murray
GEL 446
             
Arrowie
GEL 491
              Arrowie

GEL 492
              Arrowie
GEL 493
              Arrowie 

Geothermal licence applications GELA 508, 509 and 510 were withdrawn by the applicant, Callabonna Energy P/L, on 17/05/2010.

In the Adelaide Fold, the following Geothermal Permits have been granted:

Permit             Application                  Permit Holder                          Expiry Date

GEL 523           GELA 523                     Earth Heat Australia P/L             03/06/2015
GEL 524          
GELA 524                     Earth Heat Australia P/L             03/06/2015
GEL 525          
GELA 525                     Earth Heat Australia P/L             03/06/2015

GELA 559 is a new application in the Arrowie Basin by Torrens Energy Ltd over 1,776 sq km.
 


Tasmania

Onshore Tasmania, EL 14/2009 was granted on 17/05/2010 to Great South Land Minerals Ltd. The licence was granted over a reduced area of 3,119 sq km and  will expire on 16/05/2012.

Offshore, in the Bass Basin, T/18P was renewed until 22/11/2010.

Geothermal Permits

Onshore Tasmania, SEL 57/2008 has undergone partial relinquishment and now covers 1,083 sq km.


Victoria

Offshore, in the Gippsland Basin, Nexus Energy has applied for a variation to the Year 6 work program of VIC/P 49 and a 6 month permit extension.

Also in the Gippsland Basin, VIC/P 54 is being renewed.
 

Western Australia

In the Perth Basin, AWE Ltd completed farm-in and is now the operator of EP 455, holding a 90% interest. Westralian Gas & Power P/L holds the remaining 10%.

SPA 10/09-0 AO now replaces SPA 4/09-0 AO. SPA 10/09-0 AO was granted to Southern Sky Energy P/L on 14/05/2010. The SPA will expire on 13/11/2010 and the acreage option will expire on 13/05/2011.

In the Gascoyne Basin, SPA 6/08-9 AO and SPA 9/09-0 AO were granted on 01/06/2010 to New Standard Onshore P/L. SPA 9/09-0 AO was granted over reduced area of 4,393 sq km. Both SPAs will expire on 30/11/2010.

In the Carnarvon Basin, WA-191-P has been renewed with the reduction in area until 04/05/2015. The licence now covers 649 sq km.

In the Barrow Basin, WA-192-P has been renewed with the reduction in area until 04/05/2015. The licence now covers 441 sq km.

The following Exploration Permits have been granted -

Licence           Application       Basin               Permit Holder                             Expiry Date

WA-444-P         W 09-10            Carnarvon          Chevron, Mobil, Shell                     09/05/2016
WA-445-P
         W 09-9              Carnarvon          Finder No 2 P/L                            12/05/2016
WA-446-P
         W 09-9              Bonaparte         Finder No 1 P/L                            12/05/2016
WA-447-P
         W 09-2              Browse             Woodside, Mitsui E&P                  09/05/2016
WA-448-P
         W 09-12            Carnarvon          Woodside, Japan Australia LNG     09/05/2016

WA-449-P
         W 09-1              Browse             Woodside, Mitsui E&P                  09/05/2016

Geothermal Permits

In the Perth Basin, Geothermal Permits GEP 5 and GEP 6 have had their expiry dates extended and will now expire on 29/07/2016.


New Zealand

APP 52694 is a new application in the East Coast Basin by East Coast Energy Ventures Ltd over 2,228 sq km.  This area is also under application as APP 52698 by Orient Petroleum (NZ) Ltd.

APP 52717 is a new application in the Canterbury Basin by New Zealand Oil & Gas Ltd over 3,247 sq km.

In the Raukumara Basin, gazettal Block 2 R and partially Block 1 R were granted to Petrobras as PEP 52707. The licence covers 12,350 sq km and will expire on 31/05/2015. Work program is as follows –

18 months
: 800k 2D seismic reprocessing, technical studies, 3000k 2D seismic
24 months
: seismic interpretation
27 months
: commit or surrender
36 months
: 800k 3D seismic
42 months
: technical studies
44 months
: commit or surrender
60 months
: 1 exploration well

In the Taranaki Basin, APP 52181 was granted as PEP 52181 to Roc Oil (New Zealand) Ltd 50%; Mighty River Power Gas Investments Ltd 20%; L&M Energy Ltd 15% and Mosaic Oil NL 15%. The licence will expire on 18/05/2015. Work Program is as follows -

12 months
: 145k 3D seismic reprocessing
24 months
: technical studies, commit or surrender
36 months: 1 exploration well, commit or surrender
48 months
: technical studies, commit or surrender
60 months
: technical studies

Exploration Permits PEP 38218, PEP 38235 and PEP 38238 were surrendered on 21/05/2010.

In the Canterbury Basin permit PEP 38262, interest transfer under farm-in agreement was approved by Crown Minerals and the interests are changed to the following: Origin Energy Resources New Zealand Ltd 50% and Anadarko New Zealand Company 50%. Crown Minerals approval for PEP 38264 interest transfer is still pending.

Also in the Canterbury Basin, NZOG is seeking to farm out some of its 40% interest in PEP 38259.

In the Westland Basin, Chartwell NZ P/L has met the requirements of Phase 2 of the farm-in agreement and earned the additional 30% in PMP 50100.

In the Waikato Basin, PEP 38605 has undergone partial relinquishment and now covers a reduced area of 2,578 sq km.


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