EXPLORATION and production company AWE is moving forward with a renewed focus on developing its Western Australian assets after recent discoveries there.
Speaking at the recent RIU Good Oil conference in Perth, AWE general manager exploration and geoscience Neil Tupper said the company had a strong position in the Perth basin, with a good mix of conventional tight gas and shale opportunities.
“I think it is encouraging in these times that we still seem to be coming up with blocks and prospects,” he said.
Mr Tupper said AWE’s reserve and resource base demonstrated the increasing importance of Western Australia for the company.
Located in the Perth basin are the company’s Senecio field and Waitsia field which are currently being developed.
Mr Tupper said these fields are excitingopportunities for AWE.
“We think it is (Waitsia) the largest onshore conventional gas discovery for over 30 years and we are pretty excited about that,” he said.
“It is definitely true to say that this new play has reinvigorated the Perth basin from an exploration and development perspective.”
AWE has prioritised Waitsia for commercial development and is moving quickly to implement low cost, early stage production, using existing wells and facilities, with the aim of selling gas into the domestic Western Australian market by mid-2016.
“We intend to drill more appraisal wells in early 2016 and then we will start work on development planning.”
“If we progress to full field development which is likely based on the results so far, it is possible to develop this area to around 20 to 30 vertical and deviated wells and connect them to a centralised processing facility and export via existing pipelines,” he said.
Existing infrastructure, established services and a good relationship with the Mid West community will assist with the development of the project, Mr Tupper said.
Mr Tupper said AWE felt the Mid West community understood the benefits that could come their way in terms of the economy and employment.
“We think it would be great for Western Australia and we think it is important for the state to have diversity of gas supply.”
AWE’s Perth basin exploration and appraisal program resulted in the Waitsia gas field discovery, which was then upsized following evaluation of Waitsia 2 well results reflected in the combined gross proved and probable reserves and contingent resources of 484 billion cubic feet, net 43 million barrels of oil equivalent to AWE.
In its 2015 full year results AWE reported annual production of 5.1 million barrels of oil equivalent, sales revenue of $284 million and a statutory net loss after tax of $230 million, which included $158 million of non-cash impairments (after tax).
AWE’s underlying net loss after tax was $52 million.
AWE managing director Bruce Clement said at the time that with a disciplined approach to managing the balance sheet and a clear strategy, the company’s production target of 10 million barrels of oil equivalent by the end of 2018 was achievable.
“Looking ahead, AWE’s diverse portfolio of assets will continue to provide operating cash flows during this period of low oil prices. We continue to grow our reserves and resources and we are progressing the development of four cornerstone production assets that will take us well beyond the next decade,” Mr Clement said.