Two recent oil discoveries in the northern Perth Basin have confirmed oil remains, without doubt, “first prize” when it comes to hydrocarbon finds in Australia.
Two recent oil discoveries in the northern Perth Basin have confirmed oil remains, without doubt, “first prize” when it comes to hydrocarbon finds in Australia.
The most recent, the Cliff Head oil discovery, coming within three months of the Hovea oil find, has not just fired companies to jostle for equity in the region.
Undrilled prospects on the same trend could contain substantial reserves and the enthusiasm has prompted claims of soaring equity prices and the beginning of consolidation in the WA energy sector.
One industry analyst has compared the interest and potential rationalisation with the recent consolidation of Western Australia’s gold assets.
While second-person confirmation of some claims and predictions is difficult to come by, and companies are unwilling
to speak of rumoured corporate deals, analysts and industry-players alike are agreeing that the Perth Basin’s time has come.
Although it was drilled in the 1960s and 70s, the Perth Basin is considered frontier territory and has historically been spurned by local players preferring oil assets in far more mature world regions.
The near offshore Cliff Head discovery has confirmed suspicions of oil extending from the onshore Hovea field just south-east of Dongara, and companies have moved quickly to ensure a better slice of the potential action.
Much of this action is centred on TP/15, the permit region between the Cliff Head find in WA 286P and the Dongara coastline. This permit contains undrilled prospects on the same trend and equity share is changing dramatically.
Since mid-month, Roc Oil has exercised an option to acquire 20 per cent and Arc Energy has exercised one to take up 5 per cent.
Meanwhile, Norwest Energy is still finalising negotiations to secure 10 per cent.
Forty per cent stakeholder Hardman Resources would not confirm it was in negotiations with Norwest, but Hardman managing director Ted Ellyard admitted the company would be happy to reduce costs through a good deal.
One TP/15 partner ventured the cost of equity in this permit had risen enough to discourage it from seeking a greater stake in the near future, ahead of proper appraisal.
Another offshore northern Perth Basin permit, has attracted heightened interest since the Cliff Head find.
Last week, Origin Energy secured a 30 per cent stake and operatorship of this permit, WA 226P, and Voyager Energy has moved to acquire 5 per cent, equal to the interest it holds in WA 286P.
Origin Energy is also the operator of the onshore Perth Basin production licence L1, the scene of last year’s Hovea oil discovery.
WA 226P contains an exploration well with residual oil, and Aberdeen-based Dana Petroleum, which retains 52 per cent of its former 80 per cent stake, has stated the company “has become increasingly excited by the potential of the block”.
Economic analysts predict oil will remain a major energy source for another two decades, so the excitement at finding oil, which has a far greater net present value than gas, is understandable.
Roc Oil and Arc Energy – 50 per cent equal partner in the Hovea discovery – are nonetheless wary of commercial significance forecasts for the oil finds, ahead of definitive appraisal.
However, Roc Oil managing director John Doran was happy to offer: “A lot of people, surprised at both finding the oil and its quality, have had reason to sit up and take notice of the area.”
Quoting the Hovea and Cliff Head finds and the upcoming gazettal of other Perth Basin blocks, Dana Petroleum Far East operations manager Alan Walker has described the next few years for the area as “exciting”.
The most recent, the Cliff Head oil discovery, coming within three months of the Hovea oil find, has not just fired companies to jostle for equity in the region.
Undrilled prospects on the same trend could contain substantial reserves and the enthusiasm has prompted claims of soaring equity prices and the beginning of consolidation in the WA energy sector.
One industry analyst has compared the interest and potential rationalisation with the recent consolidation of Western Australia’s gold assets.
While second-person confirmation of some claims and predictions is difficult to come by, and companies are unwilling
to speak of rumoured corporate deals, analysts and industry-players alike are agreeing that the Perth Basin’s time has come.
Although it was drilled in the 1960s and 70s, the Perth Basin is considered frontier territory and has historically been spurned by local players preferring oil assets in far more mature world regions.
The near offshore Cliff Head discovery has confirmed suspicions of oil extending from the onshore Hovea field just south-east of Dongara, and companies have moved quickly to ensure a better slice of the potential action.
Much of this action is centred on TP/15, the permit region between the Cliff Head find in WA 286P and the Dongara coastline. This permit contains undrilled prospects on the same trend and equity share is changing dramatically.
Since mid-month, Roc Oil has exercised an option to acquire 20 per cent and Arc Energy has exercised one to take up 5 per cent.
Meanwhile, Norwest Energy is still finalising negotiations to secure 10 per cent.
Forty per cent stakeholder Hardman Resources would not confirm it was in negotiations with Norwest, but Hardman managing director Ted Ellyard admitted the company would be happy to reduce costs through a good deal.
One TP/15 partner ventured the cost of equity in this permit had risen enough to discourage it from seeking a greater stake in the near future, ahead of proper appraisal.
Another offshore northern Perth Basin permit, has attracted heightened interest since the Cliff Head find.
Last week, Origin Energy secured a 30 per cent stake and operatorship of this permit, WA 226P, and Voyager Energy has moved to acquire 5 per cent, equal to the interest it holds in WA 286P.
Origin Energy is also the operator of the onshore Perth Basin production licence L1, the scene of last year’s Hovea oil discovery.
WA 226P contains an exploration well with residual oil, and Aberdeen-based Dana Petroleum, which retains 52 per cent of its former 80 per cent stake, has stated the company “has become increasingly excited by the potential of the block”.
Economic analysts predict oil will remain a major energy source for another two decades, so the excitement at finding oil, which has a far greater net present value than gas, is understandable.
Roc Oil and Arc Energy – 50 per cent equal partner in the Hovea discovery – are nonetheless wary of commercial significance forecasts for the oil finds, ahead of definitive appraisal.
However, Roc Oil managing director John Doran was happy to offer: “A lot of people, surprised at both finding the oil and its quality, have had reason to sit up and take notice of the area.”
Quoting the Hovea and Cliff Head finds and the upcoming gazettal of other Perth Basin blocks, Dana Petroleum Far East operations manager Alan Walker has described the next few years for the area as “exciting”.