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industry news Buru Pens State Agreement For WA Domgas Buru Energy’s has struck a deal with the West Australian government to build a $500 MM Kimberley pipeline connecting to the domestic gas network in the Pilbara, an agreement representing a major boost to the company’s shale gas aspirations from its Canning Basin assets. In terms of the arrangement, WA’s domestic gas reservation policy that secures 15% of gas from new projects for domestic use, has now been extended to an onshore project for the first time. Buru Executive Director Eric Streitberg said the company still needed to prove up sufficient reserves in the Canning Basin before building the 600 km pipeline, for which purpose the company was in talks with a major pipeline player. For Western Australia, the 25 year state agreement – which carries an extension clause for another 25 years – provides security of energy tenure over the 1.7 MM hectares of exploration permits held by Buru and its joint venture partner, Japanese conglomerate, Mitsubishi. In a separate announcement, Buru Energy said it would execute a state agreement covering its core permits whereby Buru and Mitsubishi will not be required to relinquish core acreage until 2024. The company said the agreement will give it time to fully appraise its Canning Superbasin acreage and also revealed that if it satisfied its domestic gas obligations, it may, in future, consider an LNG development. Streitberg said that in terms of the agreement, provided the joint venture met its exploration, appraisal and development obligations, it would not be required to relinquish acreage in key permits EP371, EP391, EP428, EP431 and EP436 at the end of an initial six year period. The normal procedure requires a permit holder to relinquish 50% of the area in its permit after six years. “The state agreement allows us to use gas appraisal work done in one permit to offset the work obligations in any adjacent permit covered by the state agreement,” Streitberg said. “This is a change to the way the legislation currently works and will assist us to ensure that our on ground dollars are spent in a way that most quickly builds up gas reserves.” The Canning Superbasin, Buru Energy’s jewel in the crown. Effectively, the agreement secures acreage in the stipulated areas for the joint-venture until 31 January 2024. Streitberg said the agreement only covered some of their permits as the WA Government was encouraging the company to develop this acreage as a fillip to domgas supply. Significantly, the agreement covers the jewel in the crown of Buru’s assets, including the highly prospective Valhalla and Yulleroo accumulations. “In terms of relief for relinquishment, Buru and Mitsubishi are required to keep exploring for gas and to make a proposal to the state by mid-2016 for the development of a gas pipeline and project to deliver gas into the existing domestic gas pipeline network in the Pilbara, assuming we have the gas reserves to do so,” said Streitberg. The Buru boss also revealed that the WA government was targeting the delivery of 1,500 PJ of gas into the domestic market in the next 25 years. “Very important for the state, we need to have our project to deliver domestic gas approved by the state before we can seek approval for any gas export,” he said. In terms of the agreement, if the joint venture fails to prove up sufficient reserves for a domestic gas project or is unable to make it work technically, or economically, it has the option of seeking an extension or terminating the agreement. Streitberg described the 1500 PJ of gas to be delivered under the deal as “only a target”. “There is no obligation on us to actually deliver this much gas and the state agreement cannot compel us to deliver gas uneconomically. Our only obligation around gas delivery is to develop a domestic gas pipeline and project before we seek approval to export gas via LNG. We may never prove up enough reserves to justify an LNG project, in which case all of our reserves, however big they are, will be available for the domestic market.” Streitberg pointed out, however, that independent assessment of only a few wells at the Valhalla accumulation had flagged 6.5 Tcf of mean recoverable gas: “Which is about 6,900 PJ, so we think the 1,500 PJ target is something we can legitimately aim for.” Looking ahead to future potential expansion, Streitberg said LNG loomed large on the horizon. “Provided we could meet our domestic gas obligations and the economics stacked up, we would definitely look at an LNG scale development. “We are working on integrating the results of the recent Asgard well into our assessment of the Valhalla accumulation, which we are hopeful will result in an increase in the recoverable gas from that accumulation. “We are also revisiting our assessment of the Yulleroo field after the very successful Yulleroo-3 well. “Taken together, these areas may eventually be proven to hold sufficient gas to form the basis of an LNG scale development. However, we are still a fair few years away from that point. If we did go down that route, our plan is to transport the gas to the Pilbara through an expansion or twinning of our domestic gas pipeline. If we do develop an LNG project, the WA Government’s 15% domestic gas reservation policy will apply to that project, further projecting the WA domestic gas supply.” The joint venture has spent over $100 MM in the last two years with spectacular success in the Superbasin that saw Buru Energy’s share price soaring almost 800% from $0.50 to over $3.50 during this period. Western Australia’s peak energy user group, DomGas Alliance, has welcomed the agreement as a deal that could unlock a major ne w source of energy. 4 34 | PESA News Resources | December 2012 / January 2013
Mariner 2D Seismic Project 12,380KM - Browse Basin - Australia Vampire 2D Data New Acquisition Super-Tie Reprocessing The Mariner 2D Non-Exclusive Seismic Project • The Mariner 2D Seismic Project comprises of new acquisition long offset 2D non-exclusive seismic data and a complement of Super- Tie PSTM reprocessing to address the 2012 Acreage Release. • A subset of the newly acquired Vampire 2D long offset survey is packaged with selected lines of Super-Tie PSTM reprocessing designed to add data density and structural control across the acreage. • The Release Area has multiple potential petroleum systems and play types, including new coverage over a previously unexplored area interpreted to contain substantial Upper Jurassic grabens. • An aggressive exploration program is now underway in the sparsely explored adjacent acreage, including acquisition of 11,000+ km 2 regional 3D survey with multiple wells to follow. • The seismic image above illustrates a Vampire 2D line that has imaged an interpreted Upper Jurassic graben within the 2012 Acreage Release blocks. P: +61 8 9327 0300 E: sales@searcherseismic.com W: searcherseismic.com
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