Otway BasinOTWAY BASIN - onshore
BAS's onshore Otway Basin exploration projects complement the Company's offshore holdings in the Gippsland and Bass Basins. The area has good road access and infrastructure, which could allow rapid and cost effective commercialisation of any oil discoveries. The extensive gas pipeline network in the Victorian Otway Basin also enhances the potential to commercialise any gas discoveries.
Exploration permit PEP 167 is located in the onshore Otway Basin, near Portland, in western Victoria. BAS holds a 100% interest in the permit which comprises some 833 sq km. PEP 167 contains discovery wells at the 1987 Windermere-1well, which produced oil on test, and at the 2002 Port Fairy-1 oil and gas discovery well. The adjacent PEP 150 permit also contains an oil discovery at the Lindon-1 and 2 wells.
 More generally, there have been numerous hydrocarbon shows and recoveries in this area of the Otway Basin, often in wells that may have failed to intersect valid structural closures due to sparse and poor quality seismic data. These existing oil and gas discoveries demonstrate an active petroleum system with the potential to charge economic accumulations.
Windermere-1 produced 32 barrels of 41 API oil from an open-hole test of the Heathfield Sandstone member. This test provides valid data for modern analysis. Subsequent cased hole tests were unsuccessful, but may have been adversely affected by formation damage during drilling and completion operations. A 1989 follow-up well at Windermere-2 did not record any hydrocarbons, but is separated from the discovery well by a significant fault. Oil prices and available drilling techniques would likely not have supported further follow-up at that time.
While uncertainties remain, the fact of the 1987 oil recovery underpins confidence in the project. BAS's review indicates that there is good potential to achieve commercial flow rates at Windermere, particularly given careful well design, modern drilling techniques and potentially employing horizontal drilling.
Structural control for the field is provided by a grid of fair quality 2D seismic lines, which are currently being reprocessed. Preliminary deterministic estimates by BAS, based on existing seismic data, indicate that Windermere has scope for potentially commercial recoverable oil volumes. The economics of any oil production that may be established in this area are favourable, with good access and relatively short transport distance to the Geelong refinery.
While no operational schedule has yet been confirmed, appraisal strategies including seismic and / or drilling are being evaluated.
PEP 150 (application area): BAS to earn 15% via farmin
BAS can earn a 15% interest in PEP 150 by contributing to the drilling of a well. This area contains the Lindon oil discovery, but the permit is yet to be granted subject to negotiation of Native Title. BAS looks forward to a resolution of Native Title issues that will allow the granting of the PEP 150 permit and the commencement of an exploration programme in the area. |