Metgasco’s Loki oil and gas resource drawing farm-in interest

Metgasco has started the search for a farm-in partner for its Loki prospect in the Cooper-Eromanga Basin after pencilling in intriguing prospective oil and gas resources.

The company’s geo-science evaluation of Loki in ATP 2020, Queensland, following the reprocessing of legacy 2D seismic has resulted in estimated best prospective recoverable resources of 6.4 million barrels of oil in the shallower Jurassic/Cretaceous sands and 13.1 billion cubic feet of gas in Permian Toolachee sands.

Both targets have produced commercial oil and gas at the nearby Wareena gas field and the Toby oil and gas field.

Metgasco (ASX:MEL) noted that a single shallow exploration well is all that is needed to test the prospectivity of both the oil and gas targets.

The company has now initiated a farm-out process for ATP 2020 and has already received expressions of interest to review the data room from several parties.

“Metgasco’s has carefully evaluated the sub-surface potential of ATP 2020 taking into account the experienced gained from the successful exploration campaign at Vali in ATP 2021 as well as the results of re-processing the legacy seismic data,” chief executive officer Ken Aitken said.

“This work has resulted in the identification of a large shallow Jurassic/Cretaceous oil structure in addition to a Permian gas play which can be accessed via a relatively low cost well.

“The recent strengthening of crude prices has increased farm-in interest in exploring for potentially large shallow oil structures in the basin. We look forward to partnering with a farminee and further exploring this overlooked area of the Cooper Eromanga basin.”

ATP 2020 potential

The 535sqkm ATP 2020 was granted to the company in 2018 and is located in an area that is underexplored with limited activity over the past 30 years.

Despite this, any discovered oil and gas can be readily exported thanks to a gas pipeline that traverses the permit and an oil pipeline running close to the licence.

Metgasco has carried out a geological and engineering review of all wells previously drilled in the permit along with a review of publicly available exploration and production data from neighbouring blocks.

Its sub-surface work indicates that the Loki prospect extends into a neighbouring un-licenced area and has commenced an application with the regulator to secure tenure.

This article was developed in collaboration with Metgasco, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.