ONE OF Oil Search’s key objectives for 2014 is to determine how much gas is available in its PNG licence portfolio to provide gas feedstock for additional LNG production.

The company made its intention known in its half-year report for 2014 to the Australian Securities Exchange in August.

It said it had extensive interests in two major gas hubs, the NW Highlands and the Papuan Gulf basin, both of which have the potential to underpin the next phase of LNG development.

Based on the existing proven resource in the P’nyang gas field in PRL 3, the company said preparations remained on track for the submission, in early 2015, of a development licence application, with P’nyang being used as a source of gas for a potential expansion of the PNG LNG project.

Completion of planned drilling activity in the Hides field area remains a high priority, as Oil Search believes there is potential for considerable gas upside.

As previously reported, the development wells being drilled in 2014 on Hides would help constrain gas volumes at the Toro/Digimu level.

“Once the G2 and PWD wells have completed drilling, the data gathered from all the development wells will be used to refine our Hides structural and reservoir models,” Oil Search managing director Peter Botten.

“Towards the end of the year, we expect the operator to commence drilling the Hides F1 Deep well.

“To ensure the company is continually refilling its inventory of future Highlands gas exploration opportunities, over the past six months field work and seismic acquisition has taken place in a number of areas close to the existing PNG LNG Project gas fields.”

Mr Botten that this work would continue over the remainder of the year, with the objective of maturing a number of prospects for potential drilling in 2015.

In addition, Oil Search had aggressively expanded its Highlands acreage footprint during 2014, taking an interest in PPL 464, south of the P’nyang field and entering a conditional agreement to acquire 100% of PPL 402, located north of the Hides and Juha gas fields.

Most recently, the company had entered a conditional agreement to acquire a 10% interest in PPL 269, located south of the P’nyang field, and was currently acquiring an extensive 2D seismic program, aimed at confirming prospects to be drilled in late 2015.

Mr Botten said all those new licences are believed to have additional gas potential.

He said in PRL 15 in the Papuan Gulf basin, site preparation for the Antelope 4 and 5 wells was close to completion, with both wells expected to spud in the third quarter of 2014.

“A comprehensive data acquisition and testing program is planned,” he said.

“Work has also commenced on a possible third appraisal well, Antelope 6, and an exploration prospect, Antelope Deep, located south of Antelope, is being matured for likely drilling during the first half of 2015.”

The PRL 15 joint venture is presently scoping Concept Select studies and surveys, which are likely to assess a number of LNG development options, ranging from an integrated development at existing facilities through to a greenfields LNG development.

Also revealed in the second quarter results, was the fact an arbitration, in which Oil Search disputes the validity of the sale by an InterOil subsidiary of a stake in PRL 15 to a subsidiary of Total, is proceeding to a hearing in London in late November 2014.

“A decision from this arbitration is expected during the first quarter of 2015,” Mr Botten said