POWER UP: The energy juniors are charging ahead in the new year
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This year has been one of upheaval in the energy sector with events clearly highlighting that despite increasing the push to adopt reduce emissions, the renewables sector is nowhere ready enough to power up an admittedly very energy hungry society just yet.
Years of underinvestment meant that both oil and gas output have struggled to keep up with demand.
This was clearly demonstrated by Europe experiencing the angst stemming from lower than usual gas stockpiles in the lead-up to winter that, when combined with concerns that Russia might cut off supplies, have resulted in prices remaining elevated into 2022.
Oil prices have also been rising steadily this year, again due to a combination of constrained production and more cold weather in the US.
Rather predictably, the high oil and gas prices have sparked plans for greater expenditure this year with ExxonMobil flagging that it would spend between US$21bn ($29.5bn) to US$24bn this year.
But it’s not just the big end of the market. Junior oil and gas companies have also been ramping up their plans to meet this demand.
Here is a selection of junior oil and gas companies that have already reported significant news this year.
ADX has multiple streams of work in Austria but the recent success of the Anshof-3 exploration well has galvanised its oil efforts.
The well had intersected a 6m interval at its primary deep Eocene oil target, of which about 2.5-4m is expected to be a productive net pay zone – in line with other operating wells in the region along with a 20m gross gas interval within shallower Miocene formations.
A workover rig has been mobilised to test the two intervals and complete the well for potential commercial production.
Once this is completed, the company will estimate resources for the Miocene gas reservoirs and develop an appraisal and development drilling plan.
Canning Basin-focused Buru has been making waves in recent months following the discovery of what appears to be a conventional wet gas reservoir.
While the company’s Ungani oilfield continues to provide it with very welcome cash flow, the Rafael 1 exploration well has the potential to be transformational.
Not only do initial results suggest the potential for a substantial accumulation of high quality gas to be present in the structure, Buru has also highlighted several factors that could imply that Rafael may be regionally significant.
These include high estimated reservoir pressures in excess of 6,000psi and the presence of a thick Laurel Shale top seal combined with a large structural closure that supports the potential for a significantly larger gas column in the greater Rafael structure than seen at the exploration well location.
It is no surprise then that the company has leapt on the opportunity brought about by changes to Western Australia’s quarantine requirements to bring forward the testing of Rafael-1 by a week (as the crew will be released from quarantine earlier than expected).
This testing – now scheduled for the middle of February – will help Buru determine just how large the discovery actually is, confirm the low carbon dioxide content of the gas, and determine just how much of the content is made up of valuable petroleum liquids such as liquefied petroleum gas (LPG).
As if that wasn’t enough, the company is also progressing its Geovault carbon capture and storage plans, its 2H Resources’ natural hydrogen permits in South Australia, and its Battmin foray into mineral exploration – specifically for lead-zinc in the Canning Basin.
Cooper Energy has been making big strides in its goal of becoming a significant gas producer – a well-timed move given the ongoing demand for natural gas on Australia’s East Coast while supplies dwindle.
The APA Group (ASX:APA) owned and operated Orbost gas processing plant processed 46.5 terajoules of gas per day from Cooper’s Sole gas field in January, 5% higher than the previous month.
This comes ahead of the Phase 2B works that will improve plant stability and performance while extending the period between absorber clean cycles, which requires the plant to shut.
And while its Sole gas field continues to perform in line with expectations, Cooper’s Athena gas plant has also achieved its first full month of processing gas from the Casino, Henry and Netherby (CHN) fields.
Ramp-up was completed in early January and the company has achieved processing rates of up to 29.5TJ/d from the CHN fields.
Melbana could not ask for a better start to its Cuban oil exploration program with its very first onshore well, Alameda-1, intersecting an extensive oil interval of such significance that the company called time out on its drilling to preserve what it had already found.
So just how extensive is extensive anyway? Try a 500m gross interval with significant oil shows present throughout and better than anticipated gas behaviour.
Preparations are now underway to log the section just drilled, which should give a better understanding of the hydrocarbons that have been encountered.
This and the second exploration well in the program were designed to test a 236 million barrel resource in four separate targets.
Over in India, Oilex is well on its way towards restarting production from its Cambay field after securing environmental clearance, following on the Indian government approving the transfer of a 55% interest in the production sharing contract to the company – giving it a 100% participating interest.
This paves the way for bring the two existing wells back on line, which includes re-fraccing the C-77H well to increase production and develop a reliable fraccing methodology that can be applied to future wells.
C-77H had initial production levels of about 1 million standard cubic feet per day (MMscf/d) and the company believes a successful re-frac could increase out by three to five times.
Cambay currently has a resource of about 930 billion cubic feet of gas.
Planning is also advanced for the drilling of two new horizontal wells that will be drilled in the second half of 2022 and the first half of 2021.
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