September 2016 GPinfo Update


Industry Summary

 

Armour Energy Ltd has accepted a settlement agreement with AEGP Australia P/L, a subsidiary of American Energy Partners, following a recent ruling by the Queensland Supreme Court that ordered

 

Beach Energy and Cooper Energy have had success with the Callawonga 12 oil development well in PPL 220 on the western flank of the Cooper Basin. A gross oil column of 4m (approximately 2m net oil)

 

Permit Updates and Changes

 

Cosmo Oil Ashmore Ltd and Cosmo Energy Exploration & Production Co Ltd have transferred their interests in AC/RL 6 to PTTEP Australia Timor Sea P/L …

 

Buru Energy has secured a native title agreement in the Kimberley for development of onshore gas resources. The deal comes in the form of an indigenous land use agreement with the Yungngora people for land within the Noonkanbah pastoral station which includes EP 371

 

Industry Summary                                       

 

Company News

 

Armour Energy Ltd has accepted a settlement agreement with AEGP Australia P/L, a subsidiary of American Energy Partners, following a recent ruling by the Queensland Supreme Court that ordered AEP to meet its farm-in obligations, which included taking a direct interest in Armour and a staged farm-in valued at more than $US200m in cash and debt. The two companies have agreed to place the 40 million AEP-owned Armour shares within an AEP subsidiary, AEGPAS P/L, which will then be acquired by Armour at no cost. AEP has also forgone its right to earn up to a 75% interest in Armour’s NT tenements, Armour will retain 100% interest in these assets. (Source: Armour Energy announcement, 16/08/2016).

 

Armour Energy’s wholly owned subsidiary AEGPAS P/L has entered into agreements for the sale of the 40 million Armour shares that were held by AEGPAS. The resale of the shares has been completed at 7.6 cents per share and will realise proceeds of approximately $3.05m to Armour. The shares were acquired by a number of institutional and sophisticated investors including existing shareholders of the Company. (Source: Armour Energy announcement, 01/09/2016).

 

Shell is preparing to sell all or some of its New Zealand operations which carry an estimated value of more than $1 billion. Shell New Zealand country chairman Rob Jager confirmed speculation this week that investment bank JPMorgan had been appointed to support any sales process. The JPMorgan confirmation comes as part of a global sell down by Shell amid a $US30 billion ($NZ41.3 billion) global asset sale plan following its $US50 billion takeover of BG Group. (Source: Otago Daily Times, 20/08/2016, The Australian, 19/08/2016).

 

Oil Basins Ltd has entered an agreement with Ochre Group Holdings Ltd and its wholly owned subsidiary, Ochre Capital Management P/L, for the sale of Oil Basins Royalties P/L. Oil Basins Royalties P/L has a 2% royalty over production from VIC/P 47 in Victoria’s Gippsland Basin, the Canning Basin’s Derby Block EP 487, and the Cyrano field R 3 in WA. The consideration for the sale is $400,000 in loans advanced to Oil Basins by Ochre under a fundraising mandate, which the pair have agreed to terminate. The sale is subject to satisfactory due diligence, the execution of a sale and purchase agreement and obtaining necessary approvals. (Source: Oil Basins announcement, 24/08/2016).

 

AWE Ltd is pleased to announce that commercial gas sales from Stage 1A of the Waitsia gas project have commenced and that the development was delivered on time and within the approved budget of $18m. Stage 1A comprised the installation of new infrastructure to connect the Waitsia 1 and Senecio 3 gas wells to the upgraded Xyris Production Facility (XPF), which has a production capacity of 10 TJ/d, following a successful commissioning. Gas is being delivered to the Parmelia pipeline with Alinta Energy taking up to a maximum daily quantity of 9.6 TJ/d under a 2.5 year take or pay gas sales agreement. AWE is now focused on moving towards Stage 2, a full field development phase that would raise production capacity up to 100 TJ/d. The development concept selection process for Waitsia Stage 2 has begun and 2 new appraisal/production wells are planned to be drilled next year. (Source: AWE announcement, 29/08/2016).

 

Victorian Labor Premier Daniel Andrews has announced that his government will introduce a permanent ban on hydraulic fracturing and all exploration and development of unconventional gas throughout Victoria. The legislation - the first of its kind in Australia - will be introduced into State Parliament later this year. Until the legislation is passed, the existing moratorium on onshore unconventional gas exploration and development will remain in place. Andrews went even further, saying his government also will extend the current moratorium on onshore gas exploration and development until mid-2020. He said in the meantime extensive technical, environmental, and scientific studies on the risks, benefits, and impacts of onshore gas will be undertaken before a final decision on conventional work is made. (Source: Oil & Gas Journal, 30/08/2016).

 

Australia Pacific LNG has signed a 20-year gas transportation agreement with APA Group which will see APA Group build and operate a pipeline from the Australia Pacific LNG network directly to the Wallumbilla Gas Supply Hub. The 50km bi-directional pipeline, starting from APLNG’s Reedy Creek site, is the shortest distance between the facilities and the Wallumbilla, securing firm and direct access to the domestic gas market. The new pipeline should help capture additional value in the domestic east coast gas market. (Source: Origin Energy announcement, 06/09/2016).

 

Eneabba Gas Ltd has completed the sale of the Company’s Perth Basin gas assets to UIL Energy Ltd. Under the agreement, UIL has issued 90 million convertible redeemable preference shares to Eneabba Gas as consideration for the acquisition of Eneabba’s wholly owned subsidiaries GCC Methane P/L and Oceanhill P/L. (Source: UIL Energy announcement, 08/09/2016).

 

No new hydraulic fracturing for exploration or extraction will be approved in the Northern Territory from 14/09/2016, in line with Labor's election commitments, and the future of fracking will be determined by an independent scientific inquiry. NT's Chief Minister Michael Gunner said general exploratory activities across the region would continue. He also added, a panel of experts would investigate fracking in the NT and they would decide how long the moratorium would last and if it would result in a permanent ban. (Source: ABC News, 14/09/2016).

 


 

Developments

 

Oil Search says development of a second standalone LNG export terminal in Papua New Guinea is unlikely, as Exxon Mobil and Total are expected to favour cooperation to expand the existing PNG LNG Project. The company says it is in the midst of a strategy review after losing out in its battle for InterOil, which will focus on cooperation between the PNG LNG and Papua LNG Projects to determine what strategies hold the most value for all stakeholders. A development for Papua LNG is highly unlikely based on the share of equity that will reside across the various projects at completion of the InterOil transaction with Exxon Mobil, Oil Search managing director Peter Botten said. Botten believes that there is enough gas resources in existing discovered gas fields to help underpin the proven extra capacity of the two existing PNG LNG trains and potentially three additional LNG trains if planned appraisal and exploration drilling come up as hoped. (Source: Energy News Premium, 24/08/2016).

 

Origin Energy has announced that the offshore Halladale/Speculant fields in the Otway Basin have come online. The Halladale/Speculant project is expected to boost production at the Otway Gas Plant by up to 80 TJ/d. Delivered in two parts, the Halladale/Speculant project involved drilling from a land base 30km east of Warrnambool to access offshore reservoirs locations 5km off the coast in the Otway Basin and a new 33km pipeline. It has been the only onshore drilling allowed in Victoria for several years. (Source: Origin Energy announcement, 29/08/2016, Energy News Premium. 29/08/2016).

 

The Wheatstone project has been given the all-clear for start-up next year. The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has been working with Chevron since last December on the final details of the start-up of the Wheatstone field, the pipeline and the onshore plant near Onslow, and now there is nothing stopping Chevron meeting its mid-2017 goal for the plant start-up for the first two trains. Train Two is expected to follow six months later. (Source: Energy News Premium, 01/09/2016).

 

DUET Group has confirmed plans that it will assess the depleted Tubridgi gas field in Western Australia’s Carnarvon Basin for a gas storage facility. The company is seeking environmental approvals from WA’s Department of Mines and Petroleum to support proposed well activities. DUET is planning to drill, complete and test up to four wells within L 9 to assess its suitability as a gas storage facility. (Source: Energy News Bulletin, 05/09/2016).

 

The final construction phase of the $37 billion Ichthys LNG Project has begun and is scheduled to start processing LNG by next year. After four years of construction, three modules have arrived from Thailand at the INPEX-led Ichthys project in Darwin Harbour. Once the final modules are installed INPEX expects to finalise construction and then move into the testing, commissioning, and start-up phase. (Source: Energy News Bulletin, 06/09/2016).

 

Commissioning of INPEX’s Ichthys LNG Project is well underway with the central processing facility and the floating production, storage and offloading facilities starting up their main power generator in the South Korean shipyards where they are being constructed. The CPF’s three generators energised the facility’s distribution network on 09/09/2016 at the Samsung Heavy Industries shipyard in Geoje, South Korea. The FPSO’s main turbo-generators were also started up on 28/07/2016 at the nearby Daewoo Shipbuilding & Marine Engineering yard in Okpo. The CPF and FPSO will be permanently moored for 40 years of operation in the Ichthys field in the Timor Sea about 220km off the Western Australian coast. (Source: Energy News Bulletin, 12/09/2016).

 

Emerson has secured a contract to provide automation maintenance and reliability services for Shell’s Prelude floating LNG Project. Under the new multi-year support contract, Emerson experts working both onshore and offshore will provide ongoing reliability and maintenance services for an even broader range of equipment. Emerson and its local business partner, Western Process Controls, will provide equipment monitoring, diagnostic services, spares support, and maintenance for the facility’s control and safety systems, as well as thousands of instruments and valves. (Source: Energy News Bulletin, 08/09/2016).

 

Indigenous owned Rusca Environmental Solutions has been awarded an independent contract to provide waste management services for Shell Australia’s Prelude Floating Liquefied Natural Gas Project. The three to five-year contract will see the Rusca Group provide services to the Prelude facility that include container provision, coordination, receipt, storage handling, transport, tracking, disposal of waste and industrial cleaning to Prelude. The contract will make use of Rusca’s indigenous employment and training capability to provide job opportunities for local Indigenous people in the NT. (Source: Energy News Bulletin, 15/09/2016).

 

Tokyo Gas has received its first shipment of LNG produced by the Chevron-operated Gorgon project in Western Australia. The 70,000 tonnes of gas from the project was received at the company’s Ohgishima LNG Terminal in Yokohama City, Kanagawa Prefecture. The cargo is one of many that will be delivered under a 25-year (with a five-year extension) 1.1 million mtpa agreement with Chevron Australia. (Source: Energy News Premium, 16/09/2016).


 

Discoveries

 

Falcon Oil & Gas has confirmed significant indications of gas in both the Middle Velkerri and Lower Kyalla formations at Beetaloo W 1. The drilling campaign returned a gross interval of more than 570m shale gas sequence with net pay exceeding 150m. Excellent gas shows were discovered at two prospective shale sweet spots at the top and base of the Middle Velkerri formation, which Falcon said was comparable to those encountered during last year’s drilling program. The Lower Kyalla formation which is considered as a secondary shale target also provided excellent gas shows within a 150m thick liquid rich sequence. (Source: Falcon Oil & Gas announcement, 14/09/2016).

 

Beach Energy and Cooper Energy have had success with the Callawonga 12 oil development well in PPL 220 on the western flank of the Cooper Basin. A gross oil column of 4m (approximately 2m net oil) is interpreted in the primary target McKinlay Member and Namur Sandstone. The well will be cased and suspended as an oil producer and is expected to be brought online in Q2 FY17. (Source: Cooper Energy announcement, 25/08/2016 and Beach Energy announcement, 07/09/2016).

 

Bengal Energy Ltd is pleased to announce that the first four wells of the Cuisinier 2016 five well drilling campaign have been cased as future oil producers in the Murta horizon. The most recent well, Shefu 1, was drilled as a near field exploration well situated on the western flank of PL 303. Shefu 1 encountered 8.1m of gross sand with 7m of net pay exhibiting normal gradient, virgin pressure. Bengal's internal estimates suggest that Shefu 1 has the potential to materially increase the Cuisinier area oil in place and reserves, given that the Murta reservoir in the Shefu 1 area is well outside of Bengal's currently booked 1P, 2P and 3P reserves areas. (Source: OilVoice, 09/09/2016).

The Quadrant Energy operated Roc 2 appraisal of the 2015 gas-condensate discovery in the Bedout Sub-basin off Western Australia has confirmed the presence of hydrocarbons in a good-quality reservoir. The results have been recorded using Logging While Drilling technology through the Caley formation between 4,300m and 4,400m well depth. Quadrant will follow up the data acquisition process with wireline logging, including pressure testing and fluid sampling. The well has been cored through the section and is currently drilling ahead to a planned total depth of 5,250m. (Source: Oil & Gas Journal, 12/09/2016).

 Permit Changes                                                                

 

Northern Territory

 

Amadeus Basin

EP 112 and EP 125 were renewed on 22/08/2016. The licenses will expire on 21/08/2021.

Daly Basin

Jacaranda Minerals Ltd 50% and Minerals Australia P/L 50% have applied for EP(A) 348.

Georgina Basin

American Energy Partners has forgone its right to earn up to a 75% interest in Armour Energy’s Northern Territory tenements EP(A) 172, EP(A) 177, EP(A) 178, EP(A) 179, EP 191, EP 192, EP(A) 195 and EP(A) 196. Armour will retain 100% interest in these assets.

 

Imperial Oil & Gas P/L has applied for EP(A) 321, EP(A) 322, EP(A) 324, EP(A) 325, EP(A) 327, EP(A) 328 and EP(A) 337.

 

Jacaranda Minerals Ltd 50% and Minerals Australia P/L 50% have applied for EP(A) 343 – EP(A) 346.

McArthur Basin

American Energy Partners has forgone its right to earn up to a 75% interest in Armour Energy’s Northern Territory tenements EP 171, EP(A) 173, EP 174, EP 176, EP 190, EP(A) 193 and EP(A) 194. Armour will retain 100% interest in these assets.

 

Imperial Oil & Gas P/L has applied for EP(A) 319, EP(A) 320, EP(A) 323, EP(A) 326, EP(A) 329 – EP(A) 336 and EP(A) 338 – EP(A) 342.

 

Jacaranda Minerals Ltd 50% and Minerals Australia P/L 50% have applied for EP(A) 347 and EP(A) 349 – EP(A) 352.

Petrel Sub Basin

ENGIE has reportedly engaged Bank of America Merrill Lynch to kick off its Australian asset sale program. Engie is considering the sale of the Petrel field NT/RL 1.

Vulcan Sub Basin

Cosmo Oil Ashmore Ltd and Cosmo Energy Exploration & Production Co Ltd have transferred their interests in AC/RL 6 to PTTEP Australia Timor Sea P/L.

Queensland

 

Surat Basin

Armour Energy (Surat Basin) has completed the acquisition of 50% of ATP 647 FO Block from Origin.

South Australia

 

Arrowie Basin

Geothermal licenses GEL 206 and GEL 557 have been relinquished.

Cooper Basin

Stuart Petroleum P/L 50%, Santos QNT P/L 25.835%, Cooper Energy Ltd 19.165% and Victoria Oil Exploration (1977) P/L 5% have applied for PRLA 207, PRLA 208 and PRLA 209.

Officer Basin

Sequestration licences GSEL 576 – GSEL 583 have been suspended from 22/08/2016 to 21/08/2017. The licenses have had their expiry dates extended to 28/07/2022.

 

PEL 138 has been suspended from 24/08/2016 to 23/08/2017. The licence has had its expiry date extended to 15/04/2021.

 

PEL 147 and PEL 148 have been suspended from 22/08/2016 to 21/08/2017. The licenses have had their expiry dates extended to 28/07/2022.

Tasmania

 

Tasmania Basin

EL 3/2013 has been relinquished.

Victoria

 

Gippsland Basin

The variation to VIC/P 68, lodged with NOPTA on 20/04/2016, was not approved.

 

VIC/RL 3 is in the process of being renewed.

Western Australia

 

Beagle Basin

WA-465-P and WA-467 are being relinquished.

Browse Basin

A location application over WA-281-P was lodged with NOPTA on 30/08/2016.

Canning Basin

Buru Energy has secured a native title agreement in the Kimberley for development of onshore gas resources. The deal comes in the form of an indigenous land use agreement with the Yungngora people for land within the Noonkanbah pastoral station which includes EP 371.

 

L 14-3, L 14-4, L 14-5, L 14-6, L 16-1 and L 16-2 opened on 13/09/2016. Bids close on 09/03/2017.

Carnarvon Basin

New Standard Energy has elected not to develop new work programs or renew its Merlinleigh permits EP 481 and EP 482 when they fall due in August 2018.

 

DBP Development Group Nominees P/L has transferred its 100% interest in L 9 to DDGT P/L.

 

WA-14-L is being renewed.

 

Woodside has entered into binding sale and purchase agreements to acquire half of BHP Billiton’s Scarborough area assets in the Carnarvon Basin. The acquisition includes 25% interest in WA-1-R, 50% in WA-61-R, WA-62-R and WA-63-R. Woodside will pay BHP $US250m on completion of the transaction and a contingent payment of $US150m upon final investment decision to develop the Scarborough field. Completion is subject to pre-emption rights and regulatory approvals and is targeted by year-end 2016.

 

WA-364-P and WA-365-P are being renewed.

 

The year 6 work program of WA-439-P has been suspended for 12 months from 17/08/2016 to 16/08/2017. The licence has had its expiry date extended to 16/08/2017.

 

A change to the WA-497-P work program has been approved –

Year 4: G&G studies $0.2m
Year 5: G&G studies, well planning $0.45m
Year 6: 1 well $20m

 

WA-7-R is being renewed.

Dampier Basin

A suspension and extension for WA-488-P was lodged with NOPTA on 11/08/2016.

Officer Basin

L 16-3, L 16-4, L 16-5, L 16-6, L 16-7, L 16-8, L 16-9 and L 16-10 opened on 13/09/2016. Bids close on 09/03/2017.

Perth Basin

The year 5 work program for EP 320 has been extended by 3 months from 18/07/2016 to 18/10/2016. The licence has had its expiry date extended to 18/10/2016. A change to the work program has been approved –

Year 5: geotechnical studies, diagnostic fracture injectivity tests $1.25m

 

Eneabba Gas Ltd has completed the sale of the Company’s Perth Basin gas assets EP 447 and EP 495 to UIL Energy Ltd. Under the agreement, UIL has issued 90 million convertible redeemable preference shares to Eneabba Gas as consideration for the acquisition of Eneabba’s wholly owned subsidiaries GCC Methane P/L and Oceanhill P/L.

 

Subject to DMP approval, Cyclone Energy P/L and RCMA Australia will acquire equity in L 14. FIRB approval is also required. The new joint venture participants will have the following interests: Cyclone Energy P/L 33.722% (operator), RCMA Australia 60% and Norwest Energy NL 6.278%.

 

Special Prospecting Authority Application STP-SPA-63 has been withdrawn. The area reverts to vacant acreage.

 

Special Prospecting Authority STP-SPA-65 is under application. The applicant remains confidential at this time.

 

NOPTA has approved the transfer of 100% interest in WA-481-P to Pilot Energy Ltd and a 10% NPI payable to Murphy Australia WA-481-P Oil P/L on any future hydrocarbon production from the permit. The parties have submitted an application to NOPTA for transfer of a 40% interest to Key.

Petrel Sub Basin

ENGIE has reportedly engaged Bank of America Merrill Lynch to kick off its Australian asset sale program. Engie is considering the sale of the Tern field WA-27-R, Frigate field WA-40-R and the West Petrel field WA-6-R.

 

A suspension and extension for WA-459-P was lodged with NOPTA on 18/08/2016.

 

MEO says it has had interest from four substantial companies about a possible farm-in to WA-488-P that could see drilling of the giant Beehive prospect. MEO is seeking responses by the end of October.

New Zealand

 

Great South Basin

16GSC-R1 closed on 07/09/2016 and is under consideration.

Northland Basin

16NRN-R1 closed on 07/09/2016 and is under consideration.

Pegasus Basin

16PEC-R1 closed on 07/09/2016 and is under consideration.

Taranaki Basin

16TAR-R1 and 16TAR-R2 closed on 07/09/2016 and are under consideration.

 

Todd Energy Ltd has transferred its 80% interest in PEP 51149 to Todd Exploration Management Services Ltd.

 

PEP 51313 was relinquished on 11/08/2016. The area reverts to vacant acreage.

 

PEP 54865 is being relinquished.

 

Extension of land application PMP 52278 EX has been varied and now covers a reduced area of 4.5 sq km.

 

Extension of land application PMP 53803 EX has been withdrawn.

Papua New Guinea

 

Papuan Basin

On 22/01/2016, Ketu Petroleum Ltd (a wholly-owned subsidiary of Horizon Oil) acquired 95% of PPL 372 and 100% of PPL 373, effective 01/07/2015.  The deal is subject to PNG government approval.

 

Oil Search and ExxonMobil have reached agreement to each acquire 40% of PPL 374 and PPL 375 from Gini Energy Ltd. Gini Energy will retain 20% and operatorship will be transferred to ExxonMobil.  The deal is subject to conditions precedent including regulatory approvals.

 

PPL 461 was granted to Stretton Energy Ltd on 30/07/2014. The licence will expire on 29/07/2020.

 

PPL 462 was granted to Stretton Energy Ltd.  Grant and expiry dates are yet to be verified.

 

Work program for PPL 549 is as follows:

Years 1-3: G&G
Year 4: 1 well

 

Oil Search has applied for APPL 582.  The application covers PPL 385, the remnants of PPL 244 (after the exclusion of retention lease application APRL 41) and some vacant acreage.

 

Oil Search has applied for retention lease APRL 41 over the Flinders/Hagana fields. Licensees and percentages still under negotiation.

 

Twinza Oil (PNG) Ltd has applied for production licence APDL14 over the Pasca A field.

 

                                                                                                                                   

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