Otway Basin (PEL 155)
• Strong CO2 gas flow from Top Pretty Hill Formation
• Extended production test delivers 10.5-10.8 MMscfd through a 48/64” choke at 1,415 psi
• Downhole gauges in place and collecting data over coming weeks for volumetric estimate
Cooper/Eromanga Basins (ATP 2021 and PRL 211)
• Vali-2 field appraisal well spudded (subsequent to quarter end)
• Odin-1 exploration well to be drilled immediately after Vali-2
• ACCC draft determination authorising joint marketing of gas from Vali Field
At Nangwarry-1 in PEL 155 (Vintage 50%), downhole gauges were set at 2,919 metres to record pressure data that will provide an updated volumetric estimate of the Nangwarry reservoir. These gauges have been recovered, with data from the gauges to be analysed over the period from late April to early May.
At Vali-2 in ATP 2021 (Vintage 50% and operator), the SLR Rig-184 commenced drilling Vali-2, with drilling expected to be completed around mid-May. The primary objectives of Vali-2 are to appraise the extent of the Patchawarra Formation gas accumulation discovered in Vali-1 ST1, as well as assess the potential for gas in the
Toolachee Formation four-way dip closure, not tested in Vali-1 ST1.
Firetail Energy Services Pty Ltd, an oil and gas service provider that was a potential farm-in partner in EP 126 in the Northern Territory, has gone into administration. As a result of this, the farm-in agreement with Vintage to earn a 10% equity in EP126 will be terminated. Interest is being shown in the permit and Vintage will pursue those interests in a bid to attract a joint venture partner to the project.
Otway Basin, South Australia/Victoria
PEL 155 (Vintage 50%, Otway Energy Pty Ltd 50% and operator)
Nangwarry-1 was perforated across the targeted zones in the Top Pretty Hill Formation, with flow testing now complete. The well produced strongly and delivered 10.5-10.8 million standard cubic feet per day (“MMscfd”) through a 48/64” choke at a flowing wellhead pressure of 1,415 psi over a 36-hour period. This flow was measured through a 3” orifice plate and choked back in order to analyze the well over this extended flow period with stable conditions. The well is very productive and, over shorter periods and on various chokes, flowed at rates up to 22 MMscfd which were well in excess of those measured during the extended flow test.
Excellent flows from the perforations within the Top Pretty Hill Formation have now demonstrated the column height of the carbon dioxide (“CO2“) accumulation to be at least 120 metres, an increase from the 90 metres previously advised.
During the latter part of the flow testing period a production logging tool (“PLT”) was run. The logging passes across the perforations were run at 30, 60, 90 feet/min while flowing at a restricted rate by a 32/64” choke at approximately 6 MMscfd, then at a restricted rate by a 48/64” choke at approximately 11 MMscfd and finally while shut-in. The PLT data will now be assessed to determine the relative contributions from each of the perforated zones.
Once the PLT was pulled from the hole, downhole gauges were programmed and run into the hole and set at 2,919 metres to record pressure data for the extended flow and shut-in periods. Once the extended shut-in pressure data has been acquired and analysed, a more accurate volumetric estimate of the recoverable CO2 will be obtained. Prior to testing, gross recoverable estimates for Nangwarry-1 CO2 were estimated at: Low of 7.8 Bcf (3.9 Bcf net), Best of 25.1 Bcf (12.6 Bcf net), High of 82.1 Bcf (41.1 Bcf net) (refer ASX release dated 31 August 2020).
The production test and collection of volumetric data is a key milestone toward first production of food grade CO2. The data to be retrieved from downhole gauges will confirm volumes of saleable CO2 and allow the Joint Venture to consider appropriate debt funding options for the infrastructure required to produce food grade CO2. The co-produced methane (approximately 8%) can be used to power the production plant, with Supagas already commissioning preliminary design work for a CO2 plant, in line with the MOU signed in 2020 (refer ASX release dated 25 August 2020).
A stable source of CO2 is currently in high demand, with uses for food grade CO2 including refrigeration/dry ice (needed for storage of some vaccines), carbonation for soft drinks and beer, firefighting, medical devices and winemaking.
Cooper/Eromanga Basins, Queensland and South Australia
ATP 2021 (Vintage 50% and operatorship, Metgasco Ltd (“Metgasco”) 25% and Bridgeport (Cooper Basin) Pty Ltd 25%)
The Joint Venture elected to prioritise assessment of the resource upside of the Vali gas field and surrounding area, which will include the drilling of Vali-2 (and Odin-1) ahead of the purchase of flowline infrastructure. A rig contract was signed with Schlumberger to use SLR Rig-184 to drill Vali-2 and Odin-1, with an option to drill
a further ATP 2021 Vali well.
Vali-2 will appraise the primary reservoir in the field, the Patchawarra Formation, and investigate a potential Toolachee Formation gas accumulation in the Vali structure. Success in the Toolachee will provide additional reserves to those recently certified in the Patchawarra Formation. As well as this, desktop studies will address further prospectivity and potential upside in the region. It is expected that this approach will deliver an appropriately sized flowline over the long-term, allow for the potential development of a production hub, and provide greater amounts of gas for marketing during a period of rising gas price.
Once Vali-2 drilling has completed, the rig will be mobilized to the South Australian side of the border to drill Odin-1. The completion of Vali-1 ST1 will now take place at the same time as completion activities at Vali-2 and Odin-1, assuming they are successful, to allow for a cost-efficient campaign approach to well completions.
Although procurement of flowline equipment will now follow the prioritised evaluation program, other nonequipment related activities, such as route surveying, environmental approvals, and government approvals, are continuing. This will ensure an efficient installation of the flowline once equipment selection has been approved.
An application to the ACCC for the Joint Venture to enter into joint marketing arrangements was made, with the ACCC issuing a draft determination authorising gas produced from the Vali Field to be jointly marketed.
Authorisation will allow the parties to jointly negotiate and enter into long-term gas agreements with customers for the supply of gas from the Vali field.
ERCE is an independent consultancy specialising in petroleum reservoir evaluation. Except for the provision of professional services on a fee basis, ERCE has no commercial arrangement with any other person or company involved in the interests that are the subject of this Contingent Resources evaluation.
The work has been supervised by Mr Adam Becis, Principal Reservoir Engineer of ERCE’s Asia Pacific office who has over 14 years of experience. He is a member of the Society of Petroleum Engineers and also a member of the Society of Petroleum Evaluation Engineers.
PRL 211 (Vintage 42.5% and operator, Metgasco Ltd 21.25%, Bridgeport (Cooper Basin) Pty Ltd 21.25%, Beach Energy Ltd 15%)
The Joint Venture has accelerated the drilling of the Odin prospect, with the Odin-1 well expected to be drilled around May/June 2021 (following Vali-2). Odin-1 is being drilled to address a large fault bounded Patchawarra Formation closure, up dip of Strathmount-1, a well drilled in 1987 and plugged and abandoned after discovering what was then considered a non-commercial hydrocarbon accumulation.
Strathmount-1 is interpreted to have conventional gas pay in the Toolachee Formation and both conventional and low permeability gas pay in the Patchawarra Formation. Stratigraphically trapped gas outside of mapped closure provides gas resource upside.
The Odin structure has been de-risked by the success at Vali-1 ST1 and has the potential for gas in the Toolachee Formation (~8 metres of structural relief over nearly 5.2 km2 ), with a 40% chance of success (“COS”) and high chance of development, and the Patchawarra Formation (~15 metres of structural relief over nearly 2.5 km2), with a COS of 32% and high chance of development. The Odin structure has a Gross Prospective Resource of: 1U low estimate of 3.6 Bcf (1.6 Bcf net), 2U best estimate of 12.6 Bcf (5.7 Bcf net), 3U high estimate of 42.6 Bcf (19.0 Bcf net) (refer ASX release dated 22 November 2019).
Perth Basin, Western Australia
Cervantes Structure (L 14) (Vintage earning 30%, Metgasco?earning 30% and RCMA Australia Pty Ltd (“RCMA”), 40%)
The Cervantes Joint Venture signed a non-binding Letter of Intent (“LOI”) with Refine Energy Pty Ltd (“Refine”) to use Refine Rig-2 for the drilling of the Cervantes exploration prospect. It is anticipated that the Cervantes well will be drilled once the drilling campaign between RCMA and Refine is completed.
The Cervantes prospect sits within the L14 licence granted over the Jingemia oilfield and surrounds and is a high-side fault trap of multiple Permian sandstone reservoir targets (prolific producers in Perth Basin). The COS is 28% and it has a high chance of development due to its close proximity to the Jingemia oil field and processing facility. The Cervantes prospect has a Gross Prospective Resource of: 1U low estimate of 6.0 MMbbl (1.8 MMbbl net), 2U best estimate of 15.3 MMbbl (4.6 MMbbl net), 3U high estimate of 41.9 MMbbl (12.6 MMbbl net) (refer ASX release dated 15 November 2019).
Payments to related parties, as disclosed at Item 6.1 in the Company’s Cash Flow Report attached to this report (Appendix 5B) for the 3 months ended 31 March 2021, consists of $132,822 remuneration and $12,619 superannuation.