LNG

Elixir Energy Ltd, the Australian exploration and production company with coal-seam gas interests in the Gobi Basin of Mongolia, is also making progress with assets in the Australian state of Queensland where it signed a data-sharing agreement with LNG operator Santos for the Bowen Basin.

“The company has entered a data-sharing agreement with oil and gas giant Santos covering planned wells in neighbouring permits in the Taroom Trough of Queensland’s Bowen Basin,” said Elixir.

Elixir’s agreement with a Santos group company is in connection with Elixir’s 100-percent-owned Grandis Gas Project for petroleum lease ATP 2044 located in the basin.

“It provides for Elixir and Santos to exchange technical data on planned wells in the neighbouring ATP 2044 (Elixir) and ATP 2056 (Santos) exploration permits in the Taroom Trough,” a statement added.

The Elixir-Santos agreement also provides a mechanism to establish a forum for technical discussions about the deep plays in the Taroom Trough.

LNG operations

Adelaide-based Santos is the operator of the Gladstone coal-seam-gas-to-LNG plant in Queensland and runs the Darwin LNG facility in the Northern Territory. It is also a significant shareholder in Papua New Guinea LNG and the expansion project.

“We are naturally very pleased to enter into this agreement with a company of the size and quality of Santos, who is a neighbour on multiple sides of our Grandis Project,” explained Elixir’s Managing Director Neil Young.

“The enormous potential of the known and extensive gas resources in the Taroom Trough will have a greater chance of being realized through such cooperative efforts. We look forward to working with Santos in the years ahead to develop this play,” Young stated.

Elixir recently provided an update on its activities in its 100-percent owned Nomgon IX coal-seam gas production sharing contract in the South Gobi Basin of Mongolia.

“Recent coring, desorption and testing at the Big Slope coal deposits have formally yielded a gas discovery under Petroleum Resources Management System (PRMS) guidelines, having proved the presence of gas saturated coal with adequate permeability,” said Elixir.

The company said a total of 3,510 metres has now been drilled in the Big Slope area with a total of 259 metres of coal intersected.

“Elixir has measured consistent gas contents of up to 9 cubic metres per ton (on a raw gas basis) - with the expected strong correlation of increasing gas content with depth,” it added.

The company noted that the well completed most recently, Big Slope Shallow-1, intersected 37 metres of coal in a well that was 321 metres deep.

Shares purchase

Elixir, which has offices in Adelaide and in Ulaan Bataar in Mongolia, has also just launched a share purchase plan (SPP) to raise up to A$3.5 million (US$2.24M) on the same terms as a recently announced share placement.

“The board is pleased to offer existing eligible shareholders an opportunity to participate in this SPP,” said the company.

“The SPP will give all eligible shareholders an opportunity to apply for up to $30,000 worth of new shares at an issue price of A$0.07 cents per SPP share,” it added.

“For each two new shares acquired, the company will issue one free attaching listed option, exercisable at 12 cents and with a term of three years, (SPP Options),” Elixir explained.

The SPP is intended to raise A$3.5M with an ability to take an additional A$2M at the board’s discretion.

Two Australian exploration and production companies, Talon Energy and Strike Energy, have signed an agreement to supply LNG exporter Santos with natural gas for the domestic market from their Walyering gas field in the Perth Basin of Western Australia.

The Australian emerging natural gas producer Warrego Energy said the appraisal campaign near the West Erregulla gas discovery in the onshore Perth Basin was continuing with initial positive reports from drilling.

Warrego has already signed a deal with Alcoa of Australia, operator of one of the world's largest integrated bauxite mining operation, for volumes from the West Erregulla gas field discovery made in 2019.

Alcoa operates three alumina refineries, the Kwinana, Pinjarra and Wagerup plants in Western Australia, along with two bauxite mines.

Warrego has a 50-50 joint venture partner in Strike Energy.

The Warrego and Strike Energy West Erregulla concession forms part of a triangle between Mitsui’s & Co.’s Waitsia wells and Beach Energy’s Beharra Springs Deep.

The Waitsia well’s owners, Mitsui and Beach Energy, have already signed a liquefaction tolling agreement for LNG with partners at the Woodside-operated North West Shelf export plant.

The Warrego-Strike joint venture’s main discovery, the West Erregulla-2 well, had been drilled to a total depth of 5,100 metres, the deepest well drilled in onshore Australia, and flow tests achieved a world-class maximum flow rate of 69 million standard cubic feet of gas per day.

Strike Energy, as operator, provided a drilling update on May 17 on the current West Erregulla appraisal campaign.

“The WE-4 well flow testing continued with the well cleaning up and with favourable pressures measured,” said the Strike report provided to the Australian Securities Exchange by Warrego.

The report said the production testing was now in the clean-up phase and pressure conditions on initial flows at WE-4 are similar to the successful WE-2 well.

The result has been labelled “favourable” and the report said the high reservoir quality at WE-4 has been confirmed by core results.

“These results show permeability up to 430 metres in the depth of the well and porosity of up to 19.9 percent in the Kingia Sandstones,” the report explained.

Along with the WE-4 update, the joint venture said it had landed and cemented the surface casing string at WE-5, with drilling now at 2,785 metres measured depth (MD).

Warrego previously noted that any increase in West Erregulla’s certified resources would be welcomed by the market, and further success would add considerably to the current gross contingent resources. 

Elixir Energy, the Australian exploration and production company with plans for a small-scale liquefaction plant using coal-seam gas to provide clean fuel for trucks in Mongolia, is making progress in assessing resources in the South Gobi desert region.

Woodside Petroleum, the LNG operator at two plants in Western Australia and with upstream assets in southeast Asia and in the Atlantic Margin, has signed an agreement to invest in Perth-based Blue Ocean Seismic Services to boost exploration and production activities.

“The company is developing an innovative solution that has the potential to make ocean bottom seismic data acquisition cheaper and more accessible,” said Woodside.

The shares agreement was signed with parent company Blue Ocean Monitoring Ltd.

Seismic data is critical for understanding geological formations and the nature of hydrocarbon resources that may be contained within them.

“Current methods use remotely operated vehicles to place nodes on the ocean floor that capture and record soundwaves,” said Woodside whose main E&P activities are offshore Australia, Myanmar and Senegal in West Africa.

The concept was jointly developed by Woodside and Blue Ocean Seismic Services and focuses on using Autonomous Underwater Vehicles (AUVs) in place of remotely operated vehicles.

The AUVs are small submarines that are pre-programmed to self-deploy to the ocean floor and reposition multiple times.

Woodside said this method will improve efficiencies, lower costs and reduce people’s exposure to health and safety risks.

“Subject to satisfaction of conditions precedent, Woodside will take a 35 percent shareholding in Blue Ocean Seismic Services,” said the company, which did not disclose the value of the transaction.

Woodside Executive Vice President for Sustainability Shaun Gregory noted the agreement continued Woodside’s support of Western Australian technology companies.

“The use of AUVs is a priority in our technology strategy, and has global applications. We see ocean bottom monitoring playing an important role in helping us to understand more complex geological settings,” said Gregory.

Simon Illingworth, Blue Ocean Monitoring’s Group Managing Director, said he had enjoyed working with Woodside over the last two years on this technology.

“Woodside is committed to investing in innovative technologies in the oil and gas industry, while striving to continuously improve safety,” added Illingworth.

“We look forward to continuing to develop this promising technology with Woodside’s support,” he stated.

The current technical activities are focusing on small sea trials ahead of the first seismic test in early 2020.

Australia is gearing up for a new round of oil and gas exploration through 2020 that could lead to new liquefied natural gas projects in the years ahead or to the extension of the life-spans of existing ventures.

Offshore exploration and appraisal drilling is finally beginning to recover, with eight wells to be drilled in 2019, up from only five in 2018.

The Australian consultants EnergyQuest have compiled a report covering the nation’s current and forward oil and gas exploration schedules.

Results for two of the eight wells drilled in 2019 have been announced so far, with important successes at both the Corvus-2 and Dorado-2 wells.

Santos, operator of the Gladstone LNG plant and a stakeholder in two other regional liquefaction and export facilities, confirmed a significant natural gas discovery after a successful appraisal of the Corvus field in the Carnarvon Basin offshore Western Australia.

The discovery is in the Corvus 2 well in petroleum permit WA-45-R and in which Santos has a 100 percent interest.

Santos also confirmed major oil and gas resources from well tests in the Bedout Basin, offshore Western Australia, citing analysis of its Dorado-2 appraisal well.

The Dorado-2 well is located in petroleum permit WA-437-P, about 160 kilometres north of Port Hedland and two kilometres away from the Dorado-1 discovery made in July 2018.

The town of Port Hedland is 230km north of the major Western Australian LNG export terminal at Karratha, operated by Woodside Petroleum.

Other wells to be drilled in 2019 include the Achernar-1 by Woodside on behalf of the North West Shelf LNG joint venture. It was spudded in early May in WA-28-P but no result was announced.

“If Achernar-1 is successful, Woodside has approval to drill up to two further exploration wells and three appraisal wells,” said EnergyQuest.

Santos and Carnarvon Petroleum are drilling Roc South-1 and Dorado-3, the first follow-up exploration well to the Dorado discovery and the second Dorado appraisal well.

ExxonMobil is also drilling the Sculpin-1 ultra-deepwater exploration well in VIC/P70 in the established Gippsland Basin in southeast Australia.

“The regulator, approved the environment plan on 17 June, just four months after it was submitted. Diamond Offshore’s ‘Ocean Monarch’ rig, which drilled the unsuccessful Baldfish-1 and Hairtail-1 wells in VIC/P70 last year, will return,” said the EnergyQuest report.

The report said that potentially big offshore wells are also being lined up for drilling in 2020.

Offshore Drilling is planned at Eagle and Kanga (SapuraOMV/Finder), Beehive (Total, Santos, Melbana), Stromlo (Equinor) and Ironbark (BP, Cue Energy, Beach and New Zealand Oil and Gas).

SapuraOMV was formed in January when Austria’s OMV paid US$540 million for a 50 percent stake in the exploration and production assets of Malaysia’s Sapura Energy.

Both companies are making their entry to Australia via the Finder Exploration joint venture.

The Eagle prospect in the Carnarvon Basin is immediately offshore from Onslow and the Wheatstone LNG plant I and has potential 1.2 Tcf of recoverable gas.

“It lies close to existing infrastructure with BHP’s Macedon pipeline and Chevron’s Wheatstone pipeline both running through the block,” said the report.

EnergyQuest noted that the next big offshore well is likely to be Beehive in the Bonaparte Basin, offshore northwest Australia where French major Total and Santos are working towards the exercise of an option over an 80 percent stake held by Melbana Energy.

Equinor’s Stromlo-1 will be the most anticipated offshore well of 2020, assuming Equinor receives approval for its environment plan and is not delayed by the government’s decision to have the plan reviewed by Australia’s chief scientist.

“If all goes well, Equinor will be drilling Stromlo-1 late in 2020 in the Great Australian Bight off the southern coast at about the same time BP spuds an exploration well at Ironbark in the Carnarvon Basin,” said the report.

“Ironbark is a 15 Tcf prospect, located about 40 km north of the North West Shelf fields and one of the world’s largest gas prospects,” it added.

March 19 (LNGJ) - Japanese energy company Inpex Corp., the main stakeholder in the Australian Ichthys LNG export plant under construction at Bladin Point near Darwin in the Northern Territory, said it was awarded an exploration permit for WA-533-P as operator in Australia’s latest acreage release. “The block is located off the northern coast of Western Australia and covers a surface area of 12,402 square kilometres. The block’s water depth ranges between approximately 50 metres and 600 metres,” said Inpex. The block lies on an offshore extension of the onshore Canning Basin in Western Australia where promising fields have already been discovered and developed. The Ichthys LNG project is being developed with French energy company Total and is scheduled to come on stream later in 2018.