Who’s spinning the drills in Australia’s onshore heavyweight Cooper Basin?

It is one of (if not the most) prolific oil and gas producing provinces in Australia with production dating back to the 1960s and new discoveries still being made to this day.

Indeed the Cooper Basin in South Australia was where energy giant Santos (ASX:STO) made its first significant discovery of gas, while several other companies have built their fortunes around exploring and producing oil and gas there.

More than 1800 exploration, appraisal and development wells have been drilled there, with Santos estimating that there are currently about 700 producing gas wells and more than 360 producing oil wells.

This is accompanied by a substantial delivery network that sends oil and gas produced in the Cooper Basin to markets across Australia’s east coast.

While the deposits in the basin tend to be small, they remain highly economical due to the low cost of drilling and completion.

This is further supported by the success rate enjoyed by Cooper Basin players, with well-known mid-cap Beach Energy (ASX:BPT) claiming a success rate of 82 per cent in the 2018 financial year.

Beach expects to spend almost 60 per cent of its 2020 financial year investment in the Cooper Basin.

Geologically, the Cooper is a Permian to Triassic aged sequence of sediments that stretches from northeast South Australia into Queensland.

The oil and gas window is located from a depth of 1250m down with oil generally found in the Namur and Hutton sandstone units, while gas is found in the Patchawarra, Epsilon and Toolachee formations.

This basin is mostly overlaid by the larger, shallower and younger Eromanga Basin that contains formations dating back to the Jurassic to Triassic eras and is also prospective for oil and gas.

Small cap players

Given the prolific nature of the basin and the fact new acreage blocks are still being released to this day, there are several ASX small caps that have exploration and production assets in the Cooper.

One of these companies is Vintage Energy (ASX:VEN) which counts veteran oilman and former Beach managing director Reg Nelson as its chairman and fellow Beach alumni Neil Gibbins as its managing director.

Earlier this month, Vintage reported that its first operated well, Vali-1 ST1, had discovered 35m of net gas pay in the primary target Patchawarra Formation.

Gas was also noted in the Toolachee and Nappamerri Group targets, while oil shows were observed in the younger Westbourne and Birkhead formations.

Notably, the well is located at the edge of, or just outside, the known structural closures for these reservoirs, indicating that significant gas and oil potential is mapped up-dip of the Vali-1 location.

The company has cased and suspended Vali-1 ST1 and is assessing its commercial potential.

It will also review structural closures in the area to identify the potential for oil pools similar to those found in Cooper Basin’s Western Flank.

Real Energy (ASX:RLE) is currently reviewing horizontal well designs to develop its Windorah gas project, which has best estimate contingent resources of about 330 million cubic feet (MMcf) of gas.

It is planning to drill its first horizontal well this year.

Cooper Energy (ASX:COE) has a substantial portfolio in the Cooper Basin with proved and probable reserves of 53.7 million barrels of oil equivalent (MMboe) and production of 1.31MMboe in 2019.

It recently participated in the Rincon-3 well that was cased and suspended by operator Beach as a future oil producer.

Rincon-3 also confirmed the connection of the Rincon field between the Rincon-1 and Rincon North-1 wells.

Senex Energy (ASX:SXY) is another veteran of the Cooper Basin. It recently brought its Gemba gas field into production after a successful tie-in to the Santos-operated gas gathering network.

Gemba was first discovered in late 2018 and is expected to have ultimate recovery of about 15 petajoules, or about 14.3 billion cubic feet, of gas while the Gemba-1 well is currently producing about 4 million standard cubic feet of gas per day.

Oilex (ASX:OEX) is currently in the process of acquiring 27 petroleum retention licences that include the Paning tight gas discovery from Senex.

These licences cover 2445sqkm and includes permits covered by the 792sqkm Cordillo 3D seismic survey acquired by Senex in 2012.

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