Independent review increases Waitsia 2P Reserves by 78%

  • An independent review by RISC of the Waitsia gas field estimates gross 2P Reserves of 811 PJ, which is 78% higher than AWE’s previous 2P Reserves estimate at 30 June 2017
  • The increase reflects the significantly better than expected reservoir quality, thickness and well deliverability outcomes from the recent drilling and testing program
  • The independent assessment is closely aligned with AWE’s internal estimates from work completed to date, which will be finalised by year end after incorporating the most recent data from appraisal operations
  • The new gross 2P Reserves estimate is more than double the amount of gas required for the Waitsia Stage 2 project, providing additional options for both increased near term field production and significantly longer field life
  • Substantial additional upside is demonstrated by the new gross 3P reserve estimate of 1,220 PJ

AWE Limited provides information relating to 2P Reserves and 2C Contingent Resources for the Waitsia gas field (50% owned, Operator) following completion of an independent review by Perth-based RISC Operations Pty Ltd (RISC). The Waitsia gas field is located in onshore Permit L1/L2, northern Perth Basin, Western Australia.

The review and evaluation undertaken by RISC concluded that 2P Reserves for the Waitsia gas field were 78% higher than AWE’s previous estimate as at 30 June 2017. The RISC work is consistent with AWE’s current internal view of Waitsia Reserves, which will be finalised when the current flow test program and subsequent analysis and evaluation work are complete. AWE anticipates issuing a further update before the end of 2017.

AWE’s CEO and Managing Director, Mr David Biggs, said:
“The independent review of the Waitsia gas field, recently undertaken by RISC, highlights substantially higher recoverable hydrocarbons and additional production potential from the excellent quality conventional reservoirs in the Kingia and High Cliff Sandstones.

“The Waitsia Stage 2 development project is planned to deliver 100 TJ/day for at least 10 years. The additional reserves identified by this review are more than double the reserves required for this project and provide opportunities for significantly increased near term field production and longer field life.

“The recent flow tests at Waitsia-3 (50 MMscf/d) and Waitsia-2 (39 MMscf/d) were exceptional and we are aiming to flow test Waitsia-4 before the end of November. The data from the flow tests and the upgraded view of reserves by RISC will provide further information for potential gas buyers,” Biggs said.

AWE at a glance

AWE is an Australian energy company focused on upstream oil and gas exploration and production, listed on the Australian Stock Exchange (ASX:AWE).

The company was formed in 1997 to appraise oil and gas discoveries in its initial asset portfolio and to build a significant international petroleum exploration and development entity through further international asset acquisitions.

AWE's focus is on exploration and appraisal-type assets, in regions of proven prospectivity and where there is a high chance of commercial success. This focus includes currently marginal fields, whose worth may be improved by innovative appraisal and development approaches.

AUSTRALIA OPERATIONS

BassGas Project
Permit T/L1 Yolla (AWE 35%), is located in the Bass Basin, South Eastern Australia.

AWE has a 35% interest in the Origin Energy operated BassGas project that produces gas, condensate and LPG from the offshore Yolla field located in Bass Strait between Victoria and Tasmania. Product is conveyed via pipeline from the Yolla platform to a gas processing facility at Lang Lang in Victoria.

Future development: A number of future expansion opportunities exist in the Bass Basin with retention leases held for the Trefoil, Rockhopper, White Ibis and Bass discoveries located near the producing Yolla field. AWE holds a 40% interest in these leases which are operated by Origin Energy. With a similar gas/liquids mix to the Yolla field, the Trefoil field (17mmboe 2C Resources net to AWE) could potentially be tied back to the Yolla platform and utilise the existing BassGas onshore facilities.

Casino Gas Project
Permits VIC/L 24 Casino (AWE 25%) and VIC/L 30 Henry, Netherby (AWE 25%) are located offshore Otway Basin, Victoria.

AWE holds a 25% interest in the Santos operated Casino gas project in the Otway Basin in Victorian waters. Gas from the Casino, Henry and Netherby gas fields is produced via subsea wells connected by pipeline to the Iona gas processing facility in Victoria. The use of an existing gas facility minimised capital expenditure for the development and reduced environmental disturbance in the Port Campbell area.

In permit VIC/P44, where AWE holds a 25%, interpretation of reprocessed 3D PSDM seismic data is ongoing and the Operator is reviewing prospectivity.

Onshore Perth Basin
AWE Limited and its subsidiary (AWE Perth Pty Ltd formerly known as Arc Energy Limited) have been investing and operating in the North Perth Basin for more than 10 years and have successfully developed a number of commercial oil and gas fields over this time. However the history of oil and gas operations in the Perth Basin extend back approximately 50 years with the first discovery at Yardarino-1. Natural gas was first produced from the Dongara gas field in October 1971.

In September 2014, while drilling the Senecio-3 well, AWE discovered the Waitsia field, a conventional gas play in the Kingia and High Cliff Sandstone formations. With an estimated 178 Bcf gross 2P Reserves and 306 Bcf gross 2C Resources, the Waitsia field is considered to be the largest onshore conventional gas discovery in Australia for the last 30 years.

In October 2017, AWE commenced flow testing the Waitsia-3 well to further appraise the conventional Waitsia gas discovery. On 19 October, at the end of a 7 hour clean up period, the well flowed gas at an instantaneous maximum rate of 50 million standard cubic feet per day (MMscf/d) and an average of 49.5 MMscf/d on an 80/64 inch choke at ~1,929 psig flowing well head pressure over a 2.6 hour period.

In November 2017, AWE provided information relating to 2P Reserves and 2C Contingent Resources for the Waitsia gas field (50% owned, Operator) following completion of an independent review by Perth-based RISC Operations Pty Ltd (RISC). The Waitsia gas field is located in onshore Permit L1/L2.

Waitsia 2P Reserves

  • An independent review by RISC of the Waitsia gas field estimates gross 2P Reserves of 811 PJ, which is 78% higher than AWE’s previous 2P Reserves estimate at 30 June 2017
  • The increase reflects the significantly better than expected reservoir quality, thickness and well deliverability outcomes from the recent drilling and testing program
  • The independent assessment is closely aligned with AWE’s internal estimates from work completed to date, which will be finalised by year end after incorporating the most recent data from appraisal operations
  • The new gross 2P Reserves estimate is more than double the amount of gas required for the Waitsia Stage 2 project, providing additional options for both increased near term field production and significantly longer field life
  • Substantial additional upside is demonstrated by the new gross 3P reserve estimate of 1,220 PJ

North Carnarvon Basin
Permits WA-497P (AWE 100%, Operator) and WA-511P (AWE 100%, Operator) are located offshore, Western Australia.

AWE has continued to build exploration opportunities in Western Australia and was awarded an offshore permit, WA–497P (AWE 100%, Operator), in the Exmouth sub-basin/North Carnarvon Basin. The permit was awarded through the Australian 2013 Offshore Petroleum Exploration Acreage Release and is located near a number of significant producing assets. The permit was bid on the basis of a mandatory work program, including seismic reprocessing, seismic inversion and G&G studies.

A new permit, WA-511P (AWE 100%, Operator), was awarded in February 2015 and the acquisition of multi-client Eendracht 3D seismic survey data has been completed.

Perth Basin Exploration
The Perth Basin exploration assets are located in the Perth Basin, Western Australia and comprise EP320 (AWE 33%), EP413 (AWE 44.25%), EP455 (AWE 81.5%, Operator) and WA-512P (AWE 100%, Operator).

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