More surprises likely onshore Australia

HAPPY accidents are raining down on Australia’s shale gas explorers, with AWE recently joining a growing list of those to strike conventional gas where it was not expected.

Staff Reporter

Armour Energy began the trend in 2012 when it booked a conventional gas resource in shales in the Northern Territory’s McArthur Basin, based on massive volumes of free-flowing gas at Glyde-1.

Cooper Energy followed earlier this year when it found a conventional gas play in two wells in the onshore Otway Basin designed to test the shale gas potential of the Casterton Formation.

And now AWE’s tight gas and shale gas program in the northern Perth Basin has uncovered a new field known as Waitsia, with the potential to be Western Australia’s largest onshore conventional gas discovery since the 1960s.

Shale gas sceptics – and there are plenty – might venture that this is not a trend, it’s just a series of lucky coincidences.

They would also be quick to point out that shale gas explorers have yet to deliver on the mega-TcF resources that whipped up the shale gas exploration boom a few years ago.

But there is an important message in these results about Australia’s remarkable and still largely untapped potential for onshore petroleum discovery.

Onshore Australia is a frontier territory, despite half a century of modern exploration.

Even our most mature onshore basin, the Cooper, is lightly drilled by North American standards and is still turning up surprises.

In 2011, Beach Energy discovered that more than a kilometre of sediments in the Nappamerri Trough are gas saturated.

There is no talk of conventional gas in this sequence, but once again it was the search for shale gas that highlighted a much greater petroleum endowment than expected.

Shale gas explorers around the country are filling a role much like the state geological surveys that went into unexplored areas and drilled stratigraphic wells just to add to the knowledge of our continent.

Of course, Armour, Cooper and AWE and others are not drilling wells for the public interest, but their activity is advancing our knowledge of onshore petroleum basins and systems at an unprecedented rate.

And what we are learning is that onshore Australia is much richer, and possibly more oil prone, than decades of very limited exploration had led many to assume.

Arguably, the biggest and most interesting experiment in the potential for our onshore basins is underway right now in the very old rocks of the McArthur Basin.

Armour’s Glyde-1 was remarkable not just for the volume of gas that flowed to the surface, but the age of the gas itself at about 1.5 billion years.

This is believed to be the oldest gas in the world, and is challenging ideas about the length of time that hydrocarbons can be preserved in viable petroleum systems.

Armour has not had the resources for an aggressive follow up program, but others are effectively taking up the baton.

Santos has stepped in to answer the big questions about the McArthur through a farm-in agreement with unlisted Tamboran Resources, headed by Eastern Star Gas founder, Pat Elliott.

Santos is spending up to $71 million to earn a 75% interest in EPs 161, 162 and 189. It also took a 14% equity position in Tamboran.

In EP 161, Santos is believed to be reaching the final stages of the deepest well ever drilled in the McArthur Basin, Tanumbirini-1.

The well spudded on June 12 and has a targeted total depth of about 4000 metres.

We may need to wait a few more weeks for the results of Tanumbirini-1, but there is a possibility it could join the list of conventional discoveries made by shale gas wells.

Further west in the McArthur Basin, unlisted Pangaea Resources is about to drill wells in areas that have never seen a petroleum drill rig.

The only drilling has been by mineral explorers who went through the area decades ago and found oil shows in the shale units in which they hoped to discover lead and zinc.

Pangaea’s drill program follows seismic surveys last year that helped to establish the McArthur Basin is much larger than previously believed.

It is now thought to extend to the West Australian border and cover as much as one third of the Northern Territory.

This is a remarkable piece of news given the richness of the source rocks that Armour established at Glyde-1, and suggests the Northern Territory has the potential to be a world-class onshore petroleum province.

The Northern Territory’s Geological Survey will lead a field trip next week of petroleum and mineral explorers into the McArthur Basin.

Other petroleum explorers already have a footprint in the McArthur, including Blue Energy and US-based Empire Energy, but others could soon be jostling for position if Tanumbirini-1 delivers more big news for the basin.