Perth Basin spotlight: Who’s pursuing the next big oil & gas hit?
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The runaway success of Strike Energy (ASX:STX) and Warrego Energy’s (ASX:WGO) West Erregulla-2 well has placed the Perth Basin in the limelight.
It has confirmed that the target Kingia and High Cliff sandstones, which have produced gas in the nearby Waitsia field, may also be commercial elsewhere in the region.
While there remains the critical flow test to come, which will confirm without a doubt the commerciality of the discovery, West Erregulla-2 has considerably de-risked the target Kingia and High Cliff sandstones and led other companies to brush off their Perth Basin plans.
Perhaps the closest to the current action is Norwest Energy (ASX:NWE) and its Lockyer Deep and North Erregulla gas prospects that are located to the north and on trend with West Erregulla-2.
Together with operator Energy Resources, the energy arm of Mineral Resources (ASX:MIN), Norwest is now giving serious consideration to drilling a well on one of these gas prospects as the EP368 and EP 426 joint venture commitment in the first half of 2020.
Norwest and its partner could also decide on the oil route for their commitment well, targeting the Springy Creek prospect that has prospective resources of up to 61 million barrels of oil.
Additionally, Norwest, a long-time Perth Basin player, and its joint venture partners Triangle Energy (ASX:TEG) and 3C Group are currently waiting on data from a 3D seismic survey over the Xanadu oil discovery to decide if they will drill an appraisal well.
Xanadu, an offshore prospect located about 14km southeast of Triangle’s producing Cliff Head oil field, was drilled directionally from an onshore location in 2017 and intersected hydrocarbon-bearing reservoirs throughout the Irwin River Coal Measures with oil samples indicating that it is analogous to Cliff Head.
Results from the 3D survey are expected in October with the appraisal well targeted for mid-2020.
The company also operates the Arrowsmith unconventional gas discovery that had been shelved due to the Western Australian government’s moratorium on fracture stimulation, which was recently lifted for existing petroleum titles.
Triangle Energy, which recently raised $3.6m to advance its Perth Basin projects, shares Xanadu with Norwest and is progressing several opportunities within and near its Cliff Head oil field to enhance production and extend its economic life.
However, the company is also earning a 50 per cent interest in Key Petroleum’s (ASX:KEY) L7 licence, which is immediately north of Mitsui E&P and Beach Energy’s (ASX:BPT) Waitsia field, by drilling at least two wells and carrying out a 3D seismic survey.
Key recently noted that the Kingia and High Cliff sandstones that played such a prominent role in both Waitsia and West Erregulla-2 are also expected to be the primary intervals within the Parce and other prospects within the southern areas of its L7 and EP 437 permits.
L7 also hosts the Mount Horner oil field that was shut-in during 2011 due to high water production and aging infrastructure.
However, Key noted that oil shows in the deeper Permian-age reservoirs of the first wells in the high side closure were never followed-up.
The company has also mapped a number of Waitsia-style leads in a similar structural setting to that of Waitsia and the planned 3D seismic survey is expected to increase the resource potential of the area.
A more recent entrant to the Perth Basin is Metgasco (ASX:MEL), which has executed a farm-in agreement with Singapore-based Jade Energy over the L14 production licence located west of Waitsia.
Metgasco can earn a 60 per cent interest in the Western Flank of L14 by drilling one exploration well at its own cost in the period to the third quarter of 2020.
It also has the option to earn a 60 per cent interest in uncommitted areas of L14 by drilling a second exploration well in those areas by December 2020.
L14 Western Flank hosts the Western Brush and Cervantes oil prospects that could host gross prospective oil resources of up to 15.6 million barrels of oil.
The Perth Basin is heating up and once operations at West Erregulla-2 are completed, all eyes will be on big players Mitsui and Beach and their upcoming Beharra Springs well, which is expected to provide a better understanding of the Perth Basin.