AWE LIMITED MITCH ELLIS, Manager Non-Operated Assets and Chief Reservoir Engineer QUPEX, Brisbane 21 February 2017
Disclaimer This presentation may contain forward looking statements that are subject to risk factors associated with the oil and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. This presentation may also contain non-IFRS measures that are unaudited but are derived from and reconciled to the audited accounts. All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated. Reserves and Resources . The reserves and resources in this presentation are based on and fairly represent information and supporting documentation prepared by and under the supervision of qualified petroleum reserves and resource evaluators: Dr. Suzanne Hunt, AWE Manager for Engineering and Development, and Mr. Andrew Furniss, AWE General Manager for Exploration and Geoscience. Dr. Hunt, a Petroleum Engineer with a Ph.D. in Geomechanics, is a member of the Society of Petroleum Engineer Engineers and has over 19 years’ experience in the petroleum sector in geoscience, field development planning, reserves estimation, production and facilities engineering. Mr. Furniss, a member of the Society of Petroleum Engineers and the American Association of Petroleum Geologists, holds an MSc in Exploration Geophysics and a BSc (Hons) in Geological Sciences and has over 25 years’ of industry experience in strategic planning, portfolio management, prospect evaluation, technical due diligence and peer review, reserves and resource assessment, the application of advanced geophysical technology and business development. Both have consented in writing to the inclusion of this information in the format and context in which it appears. AWE reserves and contingent resources are estimated in accordance with the following: – SPE/AAPG/WPC/SPEE Petroleum Resources Management System guidelines of November 2011; – SPEE Monograph 3 “Guidelines for the Practical Evaluation of Undeveloped Reserves in Resource Plays” ; – ASX Disclosure rules for Oil and Gas Entities, Chapter 5; and – ASX Listing Rules Guidance Note 32. All material changes in reserves and contingent resources are presented to the AWE Reserves Committee. The Committee meets as a minimum every six months, or when any material change occurs, to review and endorse reserves and contingent resource estimates. The endorsed reserves and contingent resources evaluations are reported to the AWE Audit and Governance Committee and form an integral part of the half year and annual financial reporting. AWE applied deterministic methods for reserves and contingent resource estimation for all assets. The reserves were estimated at the lowest aggregation level (reservoir) and aggregated to field, asset, basin and company levels. Estimated contingent resources are un-risked and it is not certain that these resources will be commercially viable to produce. 2 2
Agenda 1. AWE Overview 2. Waitsia Discovery 3. Waitsia Development 4. Waitsia Significance
AWE Re-focussed Business • Given the volatility in global oil prices, our near-term strategy is focused on extracting maximum value from domestic gas assets, where we have exposure to anticipated price increases in both the east and west coast markets over the next two to three years. • In the west, the temporary over-supply in the spot market is expected to be absorbed and long term domestic demand remains resilient. • Customers are looking for diversity of gas producers and our Waitsia operation has the advantage of being relatively close to Perth and existing pipeline infrastructure. • In December 2016 AWE announced the sale of its 57.5% interest in the Tui area oilfields in NZ, AWE’s significantly reducing future abandonment The transaction marked the end of AWE’s liabilities. program of divesting non-core and late life assets
Reserves & Resources at 30 June 2016 2P Reserves plus 2C Resources totalled 173.5 mmboe at 30 June 2016 5
AWE Acreage in WA • AWE has a substantial Acreage position in the North Perth Basin; • AWE has an interest in a significant number of gas and oil production facilities (Xyris, Dongara, Mt Horner, Beharra Springs, Woodada); • AWE’s acreage has access to both major pipelines (DBNG, Parmelia) to southern markets; • AWE actively markets gas to customers (Industrial, Distribution) Significant Acreage and Facility Position 6
Growing WA Resources Position Significant Reserves & Resources Position in Perth Basin 7
Agenda 1. AWE Overview 2. Waitsia Discovery 3. Waitsia Development 4. Waitsia Significance
Waitsia Fundamentals Dongara Production Facility Permit: L1/L2 Waitsia Gas Project AWE 50% (Operator), Origin 50% Location: the Waitsia gas fields are located on pastoral land in the Shire of Irwin, about 14.5 kilometres east of Dongara and 367 km north of Perth. AWE has basin-dominant position with multi-TCF potential: o Conventional + Tight Sand + Shale o Strategy to build a material domestic gas business o Early & low cost development via existing infrastructure o Attractive WA gas market options o Exploration & Appraisal success at Irwin, Synaphea, Waitsia and Senecio 9
Permo-Triassic petroleum system & plays Kockatea Shale Senecio-3 Regional Seal Oil and Gas Prone Source Rock Unconventional target Dongara DONGARA/WAGINA PLAY Beharra Springs 12 commercial discoveries Senecio/Irwin Carynginia Formation Regional Seal Gas Prone Source Rock Unconventional Target Irwin River Coal Measures Gas Prone Source Rock Unconventional Target PERMO-TRIASSIC PETROLEUM SYSTEM KINGIA/HIGH CLIFF PLAY >20 wells in basin without Waitsia commercial success 10 10
Seismic control • 3D seismic coverage of varying vintages: 1994-2013. • Moderate quality but sufficient to map Top Kingia horizon. Current re-processing project. • Faults initiated in Early Permian with further growth in E-M Jurassic • Steep planar faults indicative of oblique rifting of basement fabric Waitsia north culmination Waitsia south culmination 11 11
Structure • Low-side fault closure of ~50 km2 • Crest at 3000m with 350m gross gas column • Trap defined by Mountain Bridge & Senecio faults • Senecio fault seals despite small throw • Stress suggests W-E faults prone to re-activation – not the case. 12 Depth map Top Kingia horizon Top Dongara fault pattern 12
Kingia & High Cliff correlation • Gross thickness 150-200m • Beach & shoreface setting • Quartz sand composition • Intervals of good porosity >11% in Kingia & High Cliff good reservoir net sand marker 13 13
High Perm. vs Low Perm. Sandstone Comparison Waitsia Field Senecio/Synaphea/Irwin Fields Kingia/High Cliff Reservoir Dongara/Wagina Reservoir Clay Rims prevent Quartz Cementation Pervasive Quartz Cement with & preserve abundant primary porosity localised primary but common (blue) secondary porosity (blue) 0 0.2 mm 0 0.2 mm Porosity >11%; Permeability 10 - 100+ mD Porosity 7-11%; Permeability 0.1 - 10 mD 14
Good reservoir is diagenetically controlled • Porosity controlled by diagenesis NOT depth • Clay rim formation not understood but likely TIGHT GOOD to be influenced by depositional environment • Most Kingia wells have some good reservoir – deepest to date 3750m • High Cliff more variable • Wagina reservoir in Beharra Springs field is a direct analogue log porosity data from offset wells 15 15
Waitsia Field Kingia/High Cliff 3D Model Depth Top Kingia with GWC @ • Gross gas column of 350m Senecio-3 3348 m SSTVD • Area 50 km 2 Waitsia-1 Status: Further Appraisal & Development Planning Waitsia-2 Irwin-1 Conceptual Development Plan GWC • Early start-up with connection of S-3, W-1 & W-2 to existing Xyris Facility • Full-field development with 20 vertical or deviated producers connected to a centralised processing facility • Plant capacity 100TJ/d • Potential expansion through further resource to reserves conversion view towards the north west 16
Agenda 1. AWE Overview 2. Waitsia Discovery 3. Waitsia Development 4. Waitsia Significance
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