Todd Energy Limited Focused on Taranaki Basin Hydrocarbons

THE CONFERENCE CALLER: Todd Energy has been a leading New Zealand oil and natural gas explorer for over 70 years, with an exploration program focussed on searching for new hydrocarbon resources for the security of New Zealand’s energy future.

Todd’s exploration strategy is focused within the Taranaki Basin.

This geological province underlies the Taranaki Peninsula and extends offshore from the top of the South Island, to just south of Auckland.

The basin holds all New Zealand’s commercial hydrocarbon resources, which are supported by well-developed production, processing and transport infrastructure.

In the Taranaki Basin, Todd is involved in four onshore and offshore producing fields – 100 per cent owner operator of onshore fields, McKee, Mangahewa and Kapuni, and a 26 per cent Joint Venture partner with OMV in the onshore/offshore Pohokura field.

The company purchased the McKee and Mangahewa fields in 2001, taking over as operator in 2006.

To date, the total Todd investment for the Mangahewa development is over $1 billion and consists of the Mangahewa Expansion Train 2, full field compression project and drilling of 20+ development wells across the field from several different sites.

Over the next 10 years further drilling campaigns are expected to add 450 PJ of natural gas into the market, including Todd Energy’s current Mangahewa G drilling program.

Todd has been a JV partner in the Kapuni field since its discovery in 1959.

In 2017 Todd acquired Shell’s 50 per cent to become 100 per cent owner operator.

The Kapuni focus is appraising reservoirs at 3500m depth for potential future development.

The 2016 Kapuni 3D seismic survey covering 450 square metres was an important milestone in helping extend the field life into its sixth decade of production and beyond.

Current field activity includes the construction of Kapuni J development wellsite.

With the offshore JV, Todd is a major New Zealand hydrocarbon producer with working interests in over 50 per cent of the country’s hydrocarbon energy production.

In addition to actively managing current developments, Todd Energy is continually re-evaluating and assessing new opportunities to ensure secure energy supplies for New Zealanders into the future.

 

Polemical Leader Both a Plus and Minus for Energy Sector

THE CONFERENCE CALLER: It seems some ASX-listed junior hydrocarbon players with North American projects are – like the rest of the world – a little polarised when it comes to controversial US President Donald Trump. By Mark Fraser

During the recent RIU Good Oil Conference in Perth, Trump was both highly praised and slightly berated by separate presenters with onshore assets.

Coming to the Republican president’s defence was Eon NRG’s Jerry McGann, whose company is currently focusing on its Powder River Basin play in Wyoming, where earlier this year it picked up some “juicy acreage” involving land which had been “tied up with government ownership effectively for sometimes 30, 40 or more years”.

“You might have various views as you sit down there about president Trump and some of the things he does, but one of the things that he has done is mobilise some of his government agencies, and one of those is the Bureau of Land Management – the BLM,” he said.

“And they had tens of thousands, probably hundreds of thousands, of acres that were tied up – sometimes for 30 or 40 years … and this was just fallow ground that was never available for hydrocarbon exploration.

“Trump has really got those chaps off their chairs, and ladies, and they had a lease sale here last July in the Powder River. This particular sale in the Powder River raised US$220 million.

“And what happens in these lease sales – it’s a lot of fun.

“A new lease package comes up every eight minutes, you bid online, and we have basically two technical guys in the office in Denver, and they are competing with big groups – sometimes 20 or 30 people – in other places on their computers bidding against us.”

McGann told RIU delegates under the terms of the Powder River deal Eon ERG had ended up paying just US$12/acre, was required to pay a 12.5 per cent royalty, and now held the land for 10 years with “no obligation for drilling or anything else”.

During the closing moments of his presentation, however, Samson Oil & Gas chief executive Terry Barr wasn’t so complimentary of the US president, suggesting Trump had to take some of the blame for the oil price’s volatility while commenting on his company’s hedge book.

Samson currently has an 87 per cent operated average working interest in the Foreman Butte project in North Dakota.

“Our hedges, and I guess this is an unfortunate part of the oil business, everyone likes to have a high oil price,” Barr said.

“But basically, our lender wanted to be hedged, and so our hedge book is currently valued at $2.7 million.

“It goes up and down, obviously, with the oil price every day – it was, I think, $2.1 million yesterday, so it’s all over the place.

“And I’ve never seen volatility like we have experienced … it’s quite disheartening, I think, to see (when) our beloved president comes out with some statement and the price goes down five dollars, and he comes out with another one and it goes up five dollars.

“So, it’s fairly hard to predict that in your planning.”

 

 

Unconventional Resources to Restore Balance

THE CONFERENCE CALLER: Australia’s south-eastern energy market is facing a gas shortage which is almost at crisis point – and liquefied natural gas (LNG) producers will not be able to meet long term demand at attractive prices post-2020. By Mark Fraser

This grim prediction was made by RISC’s Joe Collins during the recent RIU Good Oil Conference in Perth, where he said energy uncertainty – particularly in Victoria and New South Wales – was partly being driven by electricity transition and government failure to adjust policy settings that would “allow more supply to come into the market”.

However, it was not all bad news according to Collins, who maintained there was not a shortage of gas on the east coast, but rather a shortfall of developed gas.

In fact, he noted, there was a “massive amount” of gas available to the markets in the form of unconventional resources.

“We’ve seen what happened in Queensland with the CSG (coal seam gas) boom – the massive amount of gas that they are now producing from a very modest total previously,” Collins said.

“The potential exists for them to do that in other basins across eastern Australia. They just need to prioritise the investment, prioritise the exploration and get after that gas.

“I wouldn’t over-invest on LNG import capacity given what we know of what happened in the United States, where they over-invested in LNG import capacity, and the high prices that were in place there just stimulated a supply-side response from the unconventional gas guys.

“The same thing could happen in eastern Australia. I’m not saying that it will happen, but it could happen.”

In Western Australia, however, it was a different story as oversupply and a lack of new demand were keeping gas prices down.

Collins said the reservation policy of the state’s DomGas Alliance – a member-driven industry body representing natural gas users, infrastructure investors and producers – was also impacting the supply side.

Furthermore, recent exploration success in WA, such as the Waitsia gas discovery in the Perth Basin, was contributing to this situation.

“So really, we’re waiting for some new projects to come to the market on the demand side in Western Australia, whether they be petrochemical-type projects or new gas-to-power projects for big mines or things of that nature,” he said.

“We really think that the picture is of continued oversupply going forward – it’s highly unlikely that the market will swing to undersupply … probably as long as five to 10 years, almost, and that should keep prices low for the foreseeable future as well.”

 

 

Australian Oil and Gas Market Enjoying a Run in the Sun

THE CONFERENCE CALLER: The Resources Roadhouse was fortunate enough to score some time to hear about the state of the domestic and international oil and gas markets.

After he opened the conference we sat down for a quick chat with Argonaut director of research Micheal Eidne.

 

Triangle Energy Making Headway at Cliff Head Project in the Perth Basin

THE CONFERENCE CALLER: The Resources Roadhouse managed to grab a moent of Triangle Energy managing direor Rob Towner’s valuable time at the 2019 RIU Good Oil Conference.

During the June 2019 quarter, Cliff Head generated revenues of $6.89 million.

This was an increase of $760,000 from the previous quarter.

 

RIU Good Oil 2019 Kicks Off in Perth

THE CONFERENCE CALLER: The opening morning of the RIU 2019 Good Oil Conference opened to a standing room only audience.

Wally Graham of The Resources Roadhouse managed to catch conference organiser Jaxon Crabb for a quick update.

 

Triangle Energy Presenting at Good Oil 2019

THE CONFERENCE CALLER: With a healthy cash flow coming from its dominant holding (78.75%) in the offshore Cliff Head project in Western Australia, Triangle Energy (ASX: TEG) has been able to chase further growth opportunities in the Perth Basin.

The company has its eye on the prospective Xanadu oil field and is now awaiting the results of a recently conducted 40 square kilometre 3D seismic program.

Located offshore about 270km south west from the WA coastal town of Dongara – and 14km south of the Cliff Head oil field – Xanadu is a joint venture between Triangle (45%) and Norwest Energy.

Triangle is also completing the necessary approvals for the onshore Mt Horner l7 production licence, in which it holds a 50 per cent interest with farm out agreement partner Key Petroleum.

The PL overlies the Allanooka Terrace in the North Perth Basin (and is adjacent to the prolific Dandaragan Trough).

So far, multiple “attic” locations for infill development wells have been identified.

The JV partners now anticipate conducting a 50sqkm 3D seismic survey and drilling at least two in-fill development wells as soon as possible.

Additionally, the WA-based Triangle is looking at another growth opportunity – this time in Queensland’s Bowen Basin via its 35.47 per cent interest in State Gas, 80 per cent owner of the prospective Reid Dome gas project.

In 2018, two wells – Primero West 1 and Nyanda-4 – were successfully drilled, with the 1200 metre deep Nyanda encountering 40.4m of net coal seams as well as 25m of separate carbonaceous shales and thinner coal seams.

During the June quarter Cliff Head generated revenues of $6.89 million for project operator Triangle – a $760,000 increase over the March period due to higher production.

 

 

Talon Petroleum Presenting at Good Oil 2019

THE CONFERENCE CALLER: Being in the right address pretty much sums up Talon Petroleum’s (ASX: TDP) corporate strategy as it consolidates its presence in the UK North Sea.

During the June quarter the Perth-based company completed the acquisition of EnCounter Oil, giving it unfettered access to the highly prospective Skymoos and Rocket prospects.

Then, in late July, Talon announced two new developments regarding further holdings in the area.

First, it was granted (in a joint bid with ONE-Dyas E&P) a licence over Block 14/30b, wherein lies the Thelma, Louise and Buffalo prospects.

Best estimates for these targets are currently 29 million barrels of oil, 17mmbbl and 160 billion cubic feet of gas respectively.

Second, site survey activities over the proposed location of the Curlew-A appraisal well – in which Talon has a 10 per cent interest – was started on Block 29/7b by Corallian Energy.

Currently, Curlew-A’s gross 2C contingent resource for recoverable oil is 36.2mmbbl. According to Talon managing director Matt Worner, this acquisition was the company’s first piece of operational work since it established its UK North Sea strategy in 2018.

Moreover, it is deemed significant given it contains an estimated discovered resource of 39mmbbl and is close to nearby infrastructure.

Despite these developments, it’s the EnCounter acquisition which has arguably generated the most excitement amongst investors during 2019.

As it stands, Skymoos – which is a direct analogue to the Upper Jurassic Buzzard Field (the UK North Sea’s largest producing oil field) and is on trend with several developed oil and gas discoveries – has a best estimate prospective resources of 107mmbbl.

Meanwhile Rocket, with its potential resource of 27mmbbl, is a direct analogue to amplitude-supported oil fields to the north east.

 

 

Norwest Energy Presenting at Good Oil 2019

THE CONFERENCE CALLER: Like other Perth Basin explorers, Norwest Energy (ASX: NEW) is reviewing the oil and gas prospectivity of its Western Australian onshore portfolio in light of the Waitsia gas discovery.

In particular, the company is approaching its 10.1 square kilometre Springy Creek oil prospect – which sits in the northern part of its EP368 Joint Venture (with Energy Resources) some 30km north east of Dongara – with renewed enthusiasm, and is now confident its geological chance of success is 25 per cent.

During July Norwest told the market that Waitsia, located 5km to the west of EP368, had “opened up an exciting new petroleum play within the basin by encountering a very significant hydrocarbon accumulation within the Lower Permian Kingia and High Cliff Sandstone formations”.

“The prospect offers significant potential for sizeable oil accumulations within both the Kingia and the High Cliff Sandstone formations which, based on well intersections in the wider region, are prognosed to incorporate thick, high-quality reservoir sand units at the prospect location at target depths of 2,470 metres and 2,570m respectively,” it said.

The greater Springy Creek structure, encompassing the southern and northern culminations, is an elongate north-south trending three-way dip closure with fault closure to the south.

Reservoirs within this structural feature could be sourced by oil migrating from the proven Kockatea Shale oil kitchen to the south. Furthermore, the prospect is situated within a structural setting comparable to that of the Mt. Horner oil field 15km to the west.

In terms of its Perth Basin offshore activities, Norwest – along with Triangle Energy (Global) – is conducting a 3D seismic survey of its Xanadu oil discovery 300km north of Perth.

Results for this work should available by October.

 

 

Calima Energy Ltd Presenting at Good Oil 2019

THE CONFERENCE CALLER: Calima Energy (ASX: CE1) is in a farm‐in agreement involving oil and gas licences prospective for the Montney Formation in British Columbia (BC), Canada.

The Farm-in Agreement allows Calima to acquire a working interest of up to 55 per cent in the Montney project and operatorship of the project.

The company recently completed a three-well drilling campaign on its Calima Lands in BC, the results of which validated its early geoscience work, which predicted that the Calima Lands would be rich in gas, condensate (or light oil) and natural gas liquids.

“Our target was to match the results achieved by our regional neighbours who are established producers,” Calima Energy managing director Dr Alan Stein said.

“We believe our results show the potential to match or exceed the results of our immediate peer group.”

Results from the drilling campaign demonstrated a 35 per cent Well Recovery Increase taking the estimated ultimate recover of each well to 8.4 billion cubic feet (Bcf) per well.

Based on limited test results, the company conservatively estimated gas-to-liquids ratio conservatively estimated at 45 barrels per million cubic feet of gas (bbl/mmcf) with 65 per cent of the liquids being high-value condensate (priced at WTI).

Calima expects the liquids ratio to increase once the wells are cleaned up and on steady production.

Canada, and the Montney region, is a good place for an aspiring producer as it a global top five gas producer.

The Montney accounts for almost half of Canada’ gas and is one of North America’s most productive and lowest cost resource plays.

Production rates have been increasing in the region by 20 per cent per annum over the last three years.