Lakes Oil pins hopes on Gilbert well
By Barry FitzGerald
July 15 2003
Oil exploration stalwart Robbie Annells never lets his Lakes Oil NL go too long without a decent story to tell about the next big thing on its horizon.
That Lakes has had limited success in more than 50 years of trying to find a company-making discovery is beside the point. Annells at least makes sure that the company-maker might just be around the corner.
And so it is with the group's farm-in deal on the nicely located Bass Strait permit Vic/P47, offshore from Orbost in eastern Victoria.
Lakes can earn a 77 per cent interest in part of the permit by shooting 200 kilometres of whale-dodging seismic and by drilling a well by December next year.
There will be interest enough in the well because of its location, immediately north of the new OMV-operated Patricia Baleen gas field, about 24 kilometres offshore, which includes Santos among its partners.
But the real interest in the well will be its demonstration of the success or failure of the remote airborne sensing tool known as Falcon in mapping offshore oil targets.
Gravity Capital flew Falcon (under its Australian licensing deal with BHP Billiton on Falcon) to cover part of Vic/P47 and mapped a structure that has been dubbed Gilbert. According to Lakes's consultant, Gilbert could contain up to 54 million barrels of oil or up to 26 billion cubic feet of gas.
While there will be excitement enough if Gilbert comes in, the fact that Gilbert is only being drilled because of what Falcon's eye on the world showed up makes it a potential game changer for the exploration industry at large.
The shallow water location means it won't be an expensive well, although Lakes will be looking for someone with deeper pockets to take up some of the risk. It says that early discussions with potential partners have started.
"When Lakes gets around to drilling a follow-up to its Patties Pies No. 1 well near Bairnsdale, it could well be called Four'n Twenty Pies No 1."
Ahead of the new partner coming in, the equity interests in Gilbert are Lakes (77 per cent), Bass Strait Oil Company (10 per cent free carried to casing point), Eagle Bay Resources (10 per cent, of which 5 per cent is free carried) and Gravity (3 per cent free carried).
As an aside, it is worth noting that the naming of Gilbert breaks with the Exxon/BHP tradition of naming Bass Strait wells after fish like barracouta and marlin.
It's a nice touch given that Gilbert was the middle name of one John Gilbert May, a senior partner at May & Mellor before it was consumed by the Brits and French back in the 1980s and became something like CL Mayonnaise.
Annells was managing director of M & M and, like the rest of the industry, mourned the passing of May late in 2000. May, a great supporter of the exploration end of the market, would have liked the Gilbert story.
"Come on, it's like a day at the races," he might have said. Lakes closed steady yesterday at 1.7¢ for a market value of $13.6 million. That valuation takes in the group's dominant position in the long-ignored onshore potential of the Gippsland Basin, particularly the merging "tight" gas story in this country.
Continuing the names of wells theme - there's a guy in Portarlington who loves this stuff - comes the tip that when Lakes gets around to drilling a follow up to its Patties Pies No. 1 exploration well near Bairnsdale, it could well be called Four'n Twenty Pies No 1.
Patties Pies was a technical success in that it encountered excellent reservoir sands. Trouble was the gas had decided to move on a long time ago. Success with the follow-up well would again be looking to Patties Bakery, the new owner of the Four'n Twenty brand, as the main local gas customer.
Success in the Turkish gas market has worked wonders on the share price of Tony Barton's Amity Oil.
It has just about doubled to $1.18 from its opening price for the year of 63¢. So shareholders have already had more than their fair share of delight in a year when there is not much of it going around.
Even so, there could be more on the way if the group's high hopes for the Whicher Range gas field in WA's south-west region prove justified.
Whicher Range, 22 kilometres south of Busselton and discovered in 1969, ranks as a big gas field with an estimated resource of 4 trillion cubic feet of gas. It is in part of the world crying out for reduced dependence on the 2000 kilometre pipeline that brings gas from the North-West Shelf.
But while the Shelf gas fields are prolific producers, Whicher Range is not. Four wells drilled by various operators have shown it to be "tight". Previous attempts to get the gas to flow at commercial rates (more than 5 million cubic feet a day without artificial stimulation) have proved frustrating. US group Pennzoil spent $20 million in the late 1990s testing a technique called hydraulic fracturing in a failed attempt to get the gas flowing.
Backed by some Korean money, Amity is about to have another go, with Whicher Range 5 expected to spud in around September 10. The latest well will be drilled using the underbalanced method. The well is going to take 50 days and $6.8 million to drill and might yet need some stimulation, this time from liquid carbon dioxide.
This story was found at: theage.com.au |
