• oil exploration

ATP 927P

ATP 927P

 

 (a)          Location

ATP 927P comprises four separate blocks with a total area of approximately 1,718 km2, located 100km north-west of Eromanga in southwest Queensland. 

 (b)          Previous Exploration

Despite its location in the Cooper-Eromanga Basins, ATP 927P is considered to be very under-explored. Prior to 2014, no exploration wells had been drilled within the permit area while the existing seismic grid comprised only 435km of multi-vintage 2D regional seismic data of variable quality, with line spacing in the order of 10km.  This is despite the fact that a number of gas discoveries had been made in Permian and Triassic Cooper Basin reservoirs on structural trends located in close proximity to ATP 927P; for example, the Whanto – Marama trend to the west and the Mt Howitt anticline to the east and south of the larger, north-western block of the  permit.  This previous lack of exploration may be attributed to the structural configuration of the Cooper and Eromanga Basins over much of the permit area, with little evidence for significant structural trends and/or structural closures that would have provided conventional drilling targets.

 (c)           Geology

ATP 927P offers excellent coverage of the Jurassic to Cretaceous Eromanga Basin and the Permian to Triassic Cooper Basin. The larger, north-western block overlies the eastern part of the Windorah Trough, including the western flank of the prominent north-plunging Wareena – Mount Howitt anticlinal trend.  The two smaller southern blocks of ATP 927P overlay the eastern flank and the southern, axial part of this anticlinal trend, while the fourth and smallest block lies to the east, on the western flank of a major, northwest-plunging anticlinal trend.

 (d)          Source Rocks and Potential Reservoirs

ATP 927P is considered prospective for gas in the Cooper Basin section and potentially for oil in the Eromanga Basin section. 

A number of gas-condensate fields and discoveries occur in the Cooper Basin section in close proximity to ATP 927P (e.g., Marama, Clinton, Whanto, Solitaire, Cocos, Mt Howitt, Wareena and Vernon) with gas trapped in both Triassic and Permian reservoirs in conventional four-way dip and three-way dip, fault-closed structural traps.  These reservoirs exhibit variable reservoir quality, with average porosities typically less than 15% but DST flow rates of up to 11.35 mmscfd (Wareena-1 Toolachee Fm). Permian and Triassic reservoir sandstones within this area are sealed by intraformational shales. The Cooper Basin reservoir section in the Windorah Trough is sealed by a well-developed shaley unit forming the upper part of the Triassic Nappamerri Group. 

 Coals and carbonaceous shales of Permian age are proven hydrocarbon source rocks in the Cooper Basin. The Windorah Trough is known to contain source rocks within the Permian Toolachee and Patchawarra Formations that are mature for hydrocarbon generation and are believed to have sourced the surrounding gas-condensate fields.  

Oil has been recovered on test from the Cadna-owie, Hutton and Basal Jurassic (Poolowanna) Eromanga Basin reservoirs in Toby-1, located on the Wareena – Mount Howitt high adjacent to the southernmost blocks of ATP 927P.  Oil shows have also been recorded from Eromanga Basin reservoirs in a number of wells drilled in close proximity to the permit.  The principal Eromanga Basin reservoirs are the Jurassic Hutton Formation and Namur Sandstone, both typically exhibiting good reservoir quality.  Secondary reservoir units include sandstones within the Poolowanna, Birkhead, Westbourne, Murta and Cadna-owie Formations.  Seals are provided by the extensive shales of the Birkhead and lower Cadna-owie Formations and by intra-formational shales.  Marine claystones of the Cretaceous Wallumbilla Formation provide an effective regional seal for the Eromanga Basin reservoir section.

Many Eromanga Basin oil fields are known to be sourced from Cooper Basin source rocks, with migration into the Eromanga Basin section occurring in areas where the Triassic regional seals are breached.  The area of ATP 927P is expected to contain well developed Triassic seals, thus charge of Eromanga Basin reservoirs from a Cooper Basin source will require vertical migration of hydrocarbons via faults that breach this seal.  However, there is the possibility that the oil observed within the Eromanga Basin in proximity to ATP 927P has been derived from Eromanga Basin source rocks. The Jurassic Birkhead and Poolowanna Formations are known to contain mature, oil-prone source rocks in a substantial kitchen area lying immediately to the northwest of ATP 927P.   Migration analysis indicates oil generated from these source rocks in this area may have migrated across the permit area, potentially charging any traps that may be developed within the Eromanga Basin section. 

 (e)          Basin-centred Gas Play

Real Energy’s evaluation of ATP 927P and surrounding areas identified the potential for a basin-centred gas play to be developed within the Permian section in the deeper parts of the Windorah Trough, where coaly source rocks mature for hydrocarbon generation occur interbedded with reservoir sandstones and sealing shales.  Gas expelled from these source rocks is trapped within these adjacent reservoir sandstones.  These sandstones typically exhibit lower reservoir quality due to their greater depths of burial and may require fracture stimulation in order to achieve commercial gas flow rates.  Locally, better quality reservoir sandstones may be present as indicated by, e.g., gas flow rates in the order of 3.5 – 3.8 mmscf/d from Permian sandstones in the nearby Whanto-1 and Cocos-1 wells.

A basin-centred gas accumulation typically extends over a significant area within the deeper parts of a sedimentary basin (the Windorah Trough, in this instance), with the gas-saturated sandstones forming a large continuous gas accumulation (or stratigraphic trap) rather than being restricted to laterally more limited structural traps.  As such, gas-in-place volumes for a basin-centred gas accumulation may be substantial.

Real Energy drilled two exploration wells, Tamarama-1 and Queenscliff-1, in the larger, north-western block of ATP 927P in 2014 to test the Company’s interpretation that the Permian section in the Windorah Trough contains a basin-centred gas accumulation.  As a key element of this ‘proof-of-concept’, neither well was drilled on a seismically-mapped structural trap.  Both wells encountered gas-charged sandstones within the target Permian section, which, on cased-hole testing, flowed gas (with no formation water recovered), confirming the Company’s interpretation.

Gas flow rates from both wells were at rates of less than 1 mmcf/d, due to the poorer reservoir quality of these deeply buried sandstones.  Consequently, Real Energy made the decision to fracture stimulate one of the wells, Tamarama-1, in order to improve well productivity and achieve commercial flow rates.  A five stage frac program was successfully conducted in mid-2016 and the well is currently in the process of being flowed in order to unload the frac fluid prior to and in preparation for undertaking a comprehensive production testing program.  The unloading frac fluid is accompanied by gas flowing at variable, non-stabilised rates.  This planned test program will gather the necessary pressure and flow rate data to guide development of this gas discovery.  

Tamarama-1 and Queenscliff-1 confirmed the presence of a basin-centred gas accumulation within the Permian section of the Windorah Trough in the main part of ATP 927P.  An independent evaluation of the data from these two wells, along with that from adjacent wells and seismic mapping of ATP 927P by DeGolyer and MacNaughton (July 2015) indicates the potential for a significant basin-centred gas resource to exist in ATP 927P.  DeGolyer and MacNaughton calculate an unrisked Estimated Petroleum-Initially-in-Place mean value of 13,761 BCF within this Permian basin-centred gas accumulation in ATP 927P.

 (f)           Eromanga Oil Play

 Oil has been recovered on test from Eromanga Basin reservoirs in Toby-1, located on the Wareena – Mount Howitt high adjacent to the southernmost blocks of ATP 927P, while oil shows have also been recorded from Eromanga Basin reservoirs in a number of other wells drilled in close proximity to the permit.  These shows highlight the potential for oil accumulations within the Eromanga Basin section in ATP 927P.  

Exploration for oil within the Eromanga Basin section usually involves the drilling of structural traps typically developed over deeper Cooper Basin or basement structural trends.  The existing seismic grid in ATP 927P is too widely spaced to allow the confident mapping of structural traps at Eromanga Basin levels over most of the permit area.  Real Energy has, however,  been able to map a limited number of oil prospects within ATP 927P, all of which require further seismic control prior to any drilling decision. The possibility of encountering oil in stratigraphic traps in reservoirs of the Eromanga Basin section cannot be discounted hence these reservoirs will constitute secondary targets in wells drilled to target the deeper, Permian basin-centred gas accumulation.

 (g)          Permit

ATP 927P was granted on 24 September 2013 for commencement on 1 October 2013. The permit was transferred to Real Energy in accordance with the terms of the Sale and Purchase Agreement between Real Energy and Circumpacific Energy (Australia) Pty Ltd and Drillsearch Energy Ltd, effective from 17 March 2014.