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AWE Limited Updates Reserves and Resources

Source: 8/9/2017, Location: Not categorized

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AWE Limited (AWE) provides the following update on the company’s 2P Reserves and 2C Contingent Resources as at 30 June 2017. In the company’s June 2017 Quarterly Report (issued 28 July 2017), AWE advised that it was reviewing its Reserves and Resources with particular focus on Waitsia, BassGas and Ande Ande Lumut (AAL). The results of this review are detailed below.

Waitsia Gas Project

Following the excellent results from the Waitsia-3 appraisal well, drilled in May-June 2017, AWE has increased its share of 2P Reserves for the Waitsia gas field by 25% to 228 PJ of sales gas as at 30 June 2017. The increase in 2P Reserves (undeveloped) reflects the reclassification of a portion of 2C Contingent Resources, previously held for the southern extension of the field, to 2P Reserves.

Waitsia-3 successfully appraised the southern extension of the Waitsia Gas Field. Strong gas shows were observed across a 150 m interval of Kingia and High Cliff Sandstone (HCSS) reservoirs. The Kingia net reservoir interval in Waitsia-3 is approximately double that observed in other wells in the field and better quality than predicted.

Additionally, gas observed in the HCSS was 10 m below the lowest known gas observed in previous wells in the field. The observation of gas below the previously interpreted Gas Water Contact (GWC) may have future positive reserve and resources implications for the rest of the field and provide new appraisal and exploration opportunities within the permits held by AWE.

These revisions to AWE’s share of Waitsia 2P Reserves do not yet reflect the impact of the better than expected reservoir quality and thickness, and gas shows observed at Waitsia-3 below the current interpreted GWC. These results will be evaluated along with results from Waitsia-4 (currently being drilled) and may result in further reserves and resources upgrades.

BassGas Project

As previously advised, AWE has undertaken a review of the Yolla reservoir following a downgrade to reserves by the Operator in 2016. Subsequent to the downgrade, AWE observed that well performance and production was better than the Operator’s forecast.

Following the 2016 reserves downgrade, both the Operator and AWE undertook independent modelling of the Yolla reservoirs. After comparing the Operator’s model with AWE’s work, AWE revised upwards its share of 2P Reserves for the Yolla field by 13%, or 1 MMboe (referenced to 30 June 2016). After allowing for production (1.22 MMboe) and the reclassification of a small portion of 2P Reserves to 2C Contingent Resources (0.25 MMboe), AWE’s share of BassGas 2P Reserves at 30 June 2017 decreased by only 6% (0.48 MMboe), to 6.96 MMboe.

AAL Oil Project

As previously notified to the ASX, the Operator has advised delays to the FID schedule as a result of incorporating the G sand into the existing Plan of Development for the K sand. AWE anticipates the Operator will provide an updated resources estimate for the K & G sands in CY 2017 as part of this process.

Forward oil price curves have continued to flatten and the spot price for Brent crude remains subdued (sub-US$55/bbl). In addition, AWE has also become aware that the Operator is conducting a sale process for their 50% interest in the project.

Taken together, these factors have led to increased uncertainty in the timing of development. As a result, and in line with SPE-PRMS guidelines, AWE has reclassified its share of AAL 2P Reserves to 2C Contingent Resources.

The Waitsia Joint Venture partners in production licence L1/L2 are:
AWE Limited (via subsidiaries, Operator) 50.00%
Origin Energy Limited (via subsidiaries) 50.00%

The BassGas Joint Venture partners in production licence T/L1 are:
AWE Limited (via subsidiaries) 35.00%
Origin Energy Limited (via subsidiaries, Operator) 42.50%
Toyota Tsusho Gas E&P Trefoil Limited 11.25%
Prize Petroleum International Pte. Ltd 11.25%
The AAL Joint Venture partners in the Northwest Natuna PSC are:
AWE Limited (via subsidiaries) 50.00%
Santos Limited (Operator) 50.00%

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