Perth, Western Australia—Total exploration expenditure in Australia was some AU$4.5 billion (US$4.2 billion) in 2013, a new record and up 13% over prior-year levels, Santos Ltd. (ASX: STO.AX) senior geologist Patrick Despland said at the recent Appea Conference in Perth. And onshore spending accounted for the most growth, although it still totals less than half of offshore spending.
“The last five years are marked by a resurgence in onshore activity, whereas offshore exploration has declined steadily,” said Despland, who delivered the annual review of exploration activities for the Petroleum Exploration Society of Australia.
Many onshore basins are almost fully licensed or under application, he said, and the surge of licensing has been driven by an interest in unconventional plays and the developing LNG markets on the East Coast. Countrywide, 20 offshore permits and 52 onshore permits were awarded in 2013, with the Northern Territory and Queensland seeing the bulk of activity, at 16 and 24 awards, respectively.
In both 2012 and 2013, 69 exploration wells were drilled in onshore Australian basins. The vast majority of these targeted reservoirs in the Cooper Basin, both conventional and unconventional. The western flank of the Cooper enjoyed continued oil exploration success by Beach Energy Ltd. (ASX: BPT.AX) , Drillsearch Energy Ltd. (ASX: DLS.ASX) and Cooper Energy Ltd. (ASX: COE.AX). In the Nappamerri Trough area, 18 wells were spudded, including 14 classified as exploration. Chevron Corp. (NYSE: CVX) farmed into Beach Energy’s assets, and Drillsearch and its joint venture partner QGC joined the drilling effort. Industry effort was effective in confirming the existence of a regionally extensive basin-centered gas accumulation in tight sands, shales and deep coals.
Notable rank wildcat activity occurred in several of Australia’s oldest sedimentary basins in the Northern Territory and northern Queensland, with interesting wells in the McArthur Basin, South Nicholson Basin and Amadeus Basin. Several of the smaller operators such as Tamboran Resources, PetroFrontier Corp. (OTC: PFRRF) and Central Petroleum Ltd. (OTC: CPTLF) are now joined by much larger players such as Santos and Total SA (NYSE: TOT).
“2014 is shaping up as critical for unconventionals in the Nappamerri Trough and the Northern Territory basins, where critical tests may determine future direction,” Despland said.
Offshore, 13 exploratory wells were spudded in 2013, and six were gas discoveries, spread across the Carnarvon, Browse and Bonaparte basins. That was down substantially from 2012, when 21 exploration wells were drilled offshore. One area that retains industry interest is the Browse Basin, where the Proteus-1 discovery encountered 87 gross meters (285 feet) of gas condensate and opened up a new Montara formation play in the Greater Poseidon structure.
Additionally, although there has been no drilling yet in the deepwater Great Australian Bight, permits were awarded to Chevron and a partnership of Murphy Oil Corp. (NYSE: MUR) and Santos. Additionally, Statoil ASA (NYSE: STO) farmed into BP’s four existing exploration permits in the Bight. The industry considers the Ceduna sub-basin as one of the great remaining exploration prospects in the world.
Finally, the coal seam gas industry enjoyed a lively year of drilling. Queensland saw 46 exploration wells, 167 appraisal wells and 1,104 development wells in 2012, as activities ramped up ahead of the first deliveries to the LNG plants on Curtis Island on the country’s east coast in 2014-2015.
Contact the author, Peggy Williams, at pwilliams@hartenergy.com.
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