Recent success at the Walyering gas field in WA’s gas-rich Perth Basin has given Talon and JV partner Strike the confidence that they are onto a near-term cashflow opportunity.

Talon Energy (ASX:TPD) and Strike Energy (ASX:STX) revealed today that they would move ahead with a production test in the first quarter of next year.

This comes just a couple of days after the pair announced drilling at the Walyering-5 appraisal well had confirmed the presence of a high-quality, low CO2 (less than 1%) conventional gas accumulation at the Walyering gas field.

Walyering represents a low capex and fast development opportunity for both Strike and Talon to monetise the asset on a successful production test scheduled for Q1/2022.

Strike, as operator of the project, wants to move the Walyering field back into production as quickly as possible.

Talon CEO David Casey said the company was extremely happy with the results to date and was very supportive of progressing Walyering to production as soon as possible.

“Strike have done a great job getting the JV to this point and we are excited to start marketing gas with Strike to meet WA’s industrial gas market where conditions have been tightening of recent,” he said.

There are several reasons Walyering represents a low-cost, fast to market development opportunity, including gas specifications being better than pipeline, almost zero impurities in measured gas samples and co-location with compressor station 3 of the Parmelia Gas Pipeline – which links the field to WA’s industrial gas market.

Walyering, which is held 55% by Strike and 45% by Talon, is also located on freehold farming land and the reservoir pressure has been measured at 5 times the operating pressure of the Parmelia Gas Pipeline.

Significant upside at other Perth Basin prospects

Not only does Walyering-5 represent Talon’s first big hit in the Perth Basin, it could also spark a significant re-rating of the company’s much larger Condor Structure, which has the potential to host up to 10 times the gas resources being targeted at Walyering — while also being about 1,500m shallower.

Walyering sits within permit EP447 in the Perth Basin, which is fast becoming Australia’s next major oil and gas hub. It is only about 180km north of Perth and close to established gas transmission infrastructure.

Drilling at Walyering-5 targeted a high-quality conventional gas reservoir like that encountered by the Walyering-1 discovery well.

Walyering-1 intersected a gas reservoir which flowed at a rate of 13.5 million cubic feet per day with very low CO2 content of 1% in 1971, which led to the discovery of the Walyering conventional gas field.

The JV partners are now investigating a concept design of a production system that could support up to 20 terajoules per day, supplied by two wells from the main lobes of the Walyering gas field.

Strike has already started work to identify the location and design of the Walyering-6 well.

Talon Energy

As well as Walyering and Condor, Talon also has a right of first refusal over an interest in EP495 which contains the Ocean Hill conventional Jurassic gas discovery (currently held 100% by Strike).

Given the success at Walyering, Strike now plans to progress the Ocean Hill gas discovery towards conventional appraisal and exploration operations.

Ocean Hill is another historical Cattamarra gas discovery, and like some of the historical Walyering appraisal wells, Ocean Hill-1 revealed a 761m-thick gas charged section from 3,077m.

However, Strike said it had ineffective reservoir, only free flowing gas from a few horizons, when tested six months later. Strike believes this was a result of sub-optimal well placement and was exacerbated by poor drilling and completions practices at the time.

The Ocean Hill structure is substantially larger than Walyering and given the success at Walyering-5, now represents lower risk and material upside, Strike says.




This article was developed in collaboration with Talon Energy, 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.