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Cervantes - Significant Prospective Resources Mapped

10 September 2019

Cervantes and Western Brush Oil Prospects – Western Flank of the North Perth Basin

Significant prospective oil resources identified by L14 consortium in multi-sand exploration prospects

  • Metgasco on the 9th of September 2019 executed a binding farm-in agreement into the North Perth Basin L14 license area with Jade Energy subsidiary RCMA Australia Pty Ltd (“Jade”) (refer announcement 9/9/19).  
  • Metgasco has secured the right (exercisable by 15th Nov 2019) to drill one 2600-2900m exploration well in the Western Flank of the L14 license area in the period to Q3 CY 2020. With a commitment to drill Metgasco earns a 60% equity interest in any discovery from the well by paying 100% of the well costs and the Company has the right to select the prospect to be drilled.
  • Metgasco may, with the first well committed, elect to commit to drill one further well on any of the remaining uncommitted structures in the L14 license area (at the time of firm commitment), with that right being exercisable between April and December 2020.
  • Sub-surface work has identified the 3D seismically defined conventional oil prospects Western Brush & Cervantes, with potentially up to 15.6 mmbo of gross recoverable prospective oil resources within the Cattamarra, Dongara, Kingia and High Cliff formations.
  • Metgasco and Jade, subject to the satisfaction of regulatory and funding conditions precedent, plan to drill at least one of the prospects by the end of the third quarter CY 2020.
  • Jade and Metgasco have agreed to introduce an additional investor into the consortium for the drilling of the first well and look to close out this farm in opportunity by November 15, 2020.

Metgasco Prospective Resource Estimates for Cervantes and Western Brush:

Prospect

Reservoir

OOIP mmbls

Recoverable mmbls

Low (P90)

Best (P50)

High (P10)

Low (P90)

Best (P50)

High (P10)

Cervantes

Dongara SS

7.7

14.9

28.5

3.7

7.4

14.6

Kingia SS

5.5

17.8

54.0

2.2

7.1

22.3

HCSS

0.3

2.2

13.8

0.1

0.8

5.0

Western Brush

Cattamarra

0.3

1.5

6.0

0.04

0.2

1.0

L14 100%

13.9

36.4

102.3

6.0

15.6

42.9

Metgasco 60%

8.3

21.8

61.4

3.6

9.3

25.8

These prospective resource estimates are probabilistic in nature and are recoverable raw oil attributable to 100% interest in L14 as of 10 September 2019. The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates are un-risked and have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of potentially significant moveable hydrocarbons. The L14 JV intends to drill at least one of these prospects (and possibly both of them if agreed) in Q3 CY 2020

Metgasco has developed a comprehensive geological model across the Northern Perth Basin and assessed conventional Oil and Gas opportunities.

An extensive geological and engineering review of 3D seismic data and wells has been carried out by Metgasco in recent months and Jade in late 2019. Jade is currently reprocessing 3D seismic data which will further enhance the definition of prospects in the License area.

A detailed review of the L14 exploration potential was undertaken by Metgasco and the Cervantes and Western Brush prospects (see figure1, below) have been identified as high graded prospects for drilling.

Figure 1: Cervantes and Western Brush location in L14 / Licence Perth Basin Situation Map (map)

A summary of the Cervantes and Western Brush prospects is below, and Figures 2, 3 and 4 below provide further details:

  • The Cervantes and Western Brush structures are situated in the Western Flank area of L14 to the south west of the Jingemia field (discovered in 2002) which has produced 4.6 mmbo.
  • The Cervantes prospect as mapped is a tilted fault block (Proven Trap) with the primary target, the Kingia SS currently mapped as juxtaposed across the bounding fault to the primary Perth Basin oil source, the Kockatea Shale.
  • An observed rollover at the Cattamarra Coal Measures has been identified overlying analogue Perth Basin discoveries eg: Hovea Oil and Gas Field, Waitsia Gas Field, Beharra-2 Gas discovery, and North Yardanogo-1 oil discovery (See figure 4).
  • The Cervantes and Western Brush locations are within the SW-NE Dongara Sandstone depositional trend that includes Prolific nearby oil fields such as Cliff Head, Jingemia and Hovea.
  • The Cervantes prospect has been assessed to feature high quality Kingia/High Cliff sands (excellent gas producer at Waitsia) at the shallowest depths in the North Perth Basin.
  • The structure in includes Kockatea Shale Oil which is the source charge of the Kingia formation.
  • A moderately deviated well can intersect two discrete structures with four geological targets being the Cattamarra, Dongara, Kingia & High Cliff formations, providing four chances of discovery.

Figure 2: Cervantes top structure map for the Kingia and Dongara Formations

Figure 3: Possible Well Trajectory Intersecting Two Discrete Prospects and Four Different Formations

Figure 4: Western Brush Cattamarra rollover

  • The facility for rapid conversion of prospective resources to producing reserves exists via a 3rd party oil processing and operations agreement with L14 operator Jade, who 100% own, and operate, the Jingemia oil processing and export facility.
  • This agreement enables the realisation of profitable production within 3-6 months of any oil discovery returning early cash flows to investors well ahead of any other opportunity in the Perth Basin.
  • The Cervantes and Western Brush prospects are located 3km from the Jingemia oil processing plant with circa 5000 bopd of spare ullage.
  • Priority rights to access this unutilised capacity have been secured.   
  • Further work is underway to high-grade other prospects in L14 for drilling in 2020. Jade is aiming for four exploration wells to be drilled in the L14 license area 2020 and Metgasco has secured a conditional right to participate in two wells.

Ken Aitken, Metgasco Chief Executive Officer, commented:

“Metgasco’s experienced technical team has carefully evaluated the sub-surface potential of L14 and have secured the right to drill one of the largest multi-sand oil exploration prospects in the Perth Basin with potentially four oil prone geological formations close to the Jingemia oil field production infrastructure offering early commercialisation. The well planning and farm-in process has been initiated and together with Jade are confident of attracting additional investors to join the L14 consortium to drill the exciting Western Flank exploration area.”

ENDS

For more information contact: 

Philip Amery, Executive Chairman

Phone: +61 02 9923 9100

CONTACT US

North Sydney Office
Level 3, 2 Elizabeth Plaza
North Sydney NSW 2060

Tel: +61 2 9923 9100
Fax: +61 2 9959 5387

Metgasco Ltd  ACN 088 196 383