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Min Res sneaks up Norwest register to 19.9%

Mining heavyweight, Mineral Resources, is now lurking purposefully at 19.9% on the Norwest Energy share register after the JV partners upped their theoretical chances of hitting paydirt at the Perth Basin, Lockyer Deep-1 onshore gas prospect from 29% to 38%.

At 19.9% of the Norwest register, Mineral Resources, who already has an 80% interest in the Lockyer Deep-1 prospect, is now in the traditional “crouching position” which means it will have to launch a full takeover bid if it wants to pick up any more significant lines of Norwest stock.

Lockyer Deep-1 sits just 15km to the north east of the revered Waitsia gas discovery that rocketed the Perth Basin to oil and gas fame over the last couple of years.

Waitsia was the largest conventional onshore gas discovery in Australia when it was found by AWE Ltd in 2014.

It has since been developed into a massive onshore gas field by Japanese energy giant, Mitsui and the ASX listed Beach Energy and now boasts a stunning reserve estimate of 844 billion cubic feet of gas.

Based on a recently updated internal prospectivity assessment by Norwest, geological success at Lockyer Deep-1 could now be as high as an astounding 38% - almost triple the usual 10-15% calculations used by other energy producers when launching their own hydrocarbon exploration projects. 

Norwest said the theoretical success estimate jump from 29% to 38% was based on a number of factors, with one being the results achieved by Mitsui and Beach at their Beharra Springs Deep-1 discovery which, when recently flow-tested, reached a constrained flow rate of up to 46 million standard cubic feet of gas per day.

Like Beharra Springs Deep-1, which sits just 10km south of Waitsia and 35km south west from the Norwest JV, Lockyer Deep-1 is hosted within the Kingia Formation, suggesting they both have the right “thermally mature” source rock and basin sequence to find gas.

Both also contain a sequence of thick sandstones that act as gas reservoir rocks.

According to Norwest, east-west trending seismic lines across Beharra Springs Deep-1 and Lockyer Deep-1 reveal features that are essentially “mirror images”, with the main one being three way dip-closed structures which rely on sealing by major north-south trending bounding faults that effectively create “gas traps”.

Importantly for Lockyer Deep-1, no gas-water contact was encountered within the Beharra Springs Deep-1 well, indicating the structure may be “full to spill” and that the easterly bounding fault provides a fully competent seal to the trap.

In effect, Norwest said, Mitsui and Beach’s success at Beharra Springs Deep-1 had somewhat mitigated Lockyer Deep-1’s primary geological risk. As a result, the JV partners are now confident that they could be sitting on prospective resources of up to 1.12 trillion cubic feet of gas.

Momentum to drill Lockyer Deep-1 started to increase in earnest earlier this year with the appointment of Bruce Clement to the Norwest board.

Mr Clement was the former Chief Executive Officer of AWE when it discovered Waitsia.

A 40 year oil and gas industry veteran, he has held engineering, senior management and board positions with a number of energy producers, including ExxonMobil, Roc Oil and Santos.

Importantly, Mr Clement has extensive experience in and an intimate knowledge of the Perth Basin.

Another factor which has convinced Norwest it is on a winner with Lockyer Deep-1 is the fact it sits directly along trend from Strike Energy’s stunning Erragulla-2 discovery, which currently enjoys 2C contingent resources of 1.19 trillion cubic feet of gas.  

All the moons appear to be lining up for the $24m market capped Norwest now and Mineral Resources’ quiet creep up its share register adds a new and exciting dimension.

 

Is your ASX listed company doing something interesting ? Contact : matt.birney@businessnews.com.au

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Top 10 Shareholders

Substantial shareholders as published in the annual report.
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Total Shareholder Return as at 31/12/19

1 year TSR5 year TSR
21stNorwest Energy251%3%
66thGreat Northern Minerals125%-20%
103rdOreCorp77%53%
390thZinc of Ireland0%-40%
668 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
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144th↑Norwest Energy$502k
145th↑Zinc of Ireland$490k
147th↑Great Northern Minerals$484k
148th↑OreCorp$474k
482 listed resources companies ranked by revenue.
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