‘Gas fired recovery’ has Canberra in this junior’s corner with Beetaloo Basin drilling grant
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The Federal Government has awarded the first grants from its $50 million Beetaloo Cooperative Drilling Program to a subsidiary of ASX-listed junior Empire Energy Group (ASX: EEG).
Three grants worth up to $21 million will be awarded to Empire’s Imperial Oil and Gas, which owns Exploration Permit 187 in the NT’s Beetaloo Basin.
Canberra will cover 25% of the costs of exploration up to $7.5m per well.
Empire started its vertical Carpentaria-1 well last year targeting the Velkerri shale, announcing in October that it had hit liquids-rich gas from 833-1831m, far shallower than expected.
It has now lodged a discovery notice with the NT Government after recording flow rates including an initial peak of over 0.5mmscf/day, stablised rate of 0.37 mmscf/day over a 72 hour test period and instantaneous peak of 1.6 mmscf/day after a short shut in.
Empire is planning to drill and complete its first horizontal appraisal well after the initial success, which it compared favourably to wells drilled in the basin by big players Santos (ASX: SAN) and Origin Energy (ASX: ORG).
The $50 million Beetaloo program is part of a $224 million investment plan the Morrison Government has developed to open up the prospective onshore gas basin.
It all ties into its idea for a gas fired recovery plan out of the Covid-19 Pandemic, which has also to date included a $600 million investment in the Kurri Kurri gas plant in New South Wales.
The Beetaloo Basin program will be scrutinised as well via a Greens-chaired senate committee, with submissions due yesterday.
Resources Minister Keith Pitt used his statement yesterday to take a shot at the Greens and the Labor Opposition.
Pitt claims the investment by the Commonwealth will stimulate $150 million of private investment from oil and gas companies, eyeing an industry the Government claims could generate 6000 jobs by 2040, most of them in the NT.
“As the leader of the Greens Mr Adam Bandt has made clear – Labor and the Greens will seek to rule in coalition to destroy the gas industry, destroy the resources sector and run our economy into the ground,” he said.
Strident language indeed. It should be noted Labor shadow resources minister Madeleine King spoke glowingly about the prospect of opening up reserves in the Beetaloo Basin at last month’s APPEA conference.
While the grants for Imperial Oil and Gas were the first to be announced, Pitt says there will be more on the way in the coming months.
There are a handful of juniors with interests in the Beetaloo.
Tamboran Resources (ASX: TBN), which listed after a $60 million IPO last week, holds a 25% stake in Santos’ EP161 permit, where Santos has already spudded two horizontal wells.
It also lays claim to full ownership of EP136, where it plans to run 2D seismic before drilling the Maverick-1H horizontal well in H1 2022, located next to a well being drilled by Origin.
$40 million capped Armour Energy (ASX: AJQ) holds five exploration permits and one application across the basin, recently announcing a 20,000km2 airborne survey “equivalent to the size of Wales” over its prospects.
A number of private and international companies also have interests in the basin, according to the Department of Industry, Science, Energy and Resources, including Gina Rinehart’s Hancock Prospecting, Falcon Oil and Gas and INPEX.