A junior oil exploration company’s hard work is set to pay off with predictions they are sitting on close to 1 billion barrels of oil. Vicky Validakis spoke to IPM Petroleum about their stratigraphic play, and what it means for oil production in Australia.
The Melbourne-based company was formed in 2009 by former BHP technical engineer Brendan Brown, who is now managing director of IPB.
Brown said the development of a number of oil fields off the northwest coast of Australia is the focus of IPB, with drilling planned for the fourth quarter of this year.
The company have three offshore permits in the Browse Basin which total 14,000 square kilometres in acreage position.
In the first permit, WA-242-P, there is a oil discovery called Gwydion, which was first drilled by BHP in 1995, where they discovered oil on the surface.
Through the use of 3D seismic surveying Brown said the company was able to fully realise the potential of the region.
“There was estimated to be 6 million barrels recoverable there which is sub-economic, but what we did is acquire a 3D seismic survey over Gwydion,” Brown explained.
“Gwydion was intriguing because there was oil along that near-shore margin of the Browse Basin and what we’ve learned through 3D is that a large stratigraphic graph exists called Pryderi.”
Brown said the 3D surveying provided the company with their big discovery moment and heralded the technology as a de-risking tool.
“Obviously it’s standard technology, particularly in the deeper part of the basin where you’ve got the world class projects where they will have applied 3D, but along that whole fairway we were the first company to acquire 3DF along this play,” Brown explained.
“Importantly that’s why we have a big position because if we de-risk it we want to actually have the option over the upside so we’ve got a pretty good position.
“If it works we will have the bulk of the play locked up within our company.”
Pryderi is in the same permit area as Gwydion and Brown said it has an order of magnitude bigger than the Cooper Basin channels.
An independent assessment of the oil channel plays by ISIS has predicted huge numbers.
WA-424-P is estimated to contain 679 million barrels of mean prospective oil resources while WA-485-P have been given another 166 million barrels.
“It’s fairly substantial if we are successful in turning that into contingent resources,” Brown said.
Drilling Pryderi is the next step for the company who are aiming to spud the well in the fourth quarter of this year, at an estimated cost of around $15 million.
In 2012 IPB signed an agreement with CalEnergy which puts the junior explorer in a great commercial position.
As part of the deal CalEnergy is the operator of WA-424-P, and holds a 25% interest in the whole permit as well as a 60% interest in the Gwydion discovery.
Within three months of drilling at Pryderi, CalEnergy can increase its stake to 60% by funding additional work up to a total of $32.4 million.
“We would then have a discovery and an appraised discovery with a residual 40% interest in the permit so it puts us in a good position because it de-risks the play and we get our prospect drilled which is pretty important because we’re not just testing a prospect, we’re testing a play so there’s a lot of other on-trend leads interpretively at the same reservoir level,” Brown explained.
If the planned drill goes well later this year, Brown said a quick turn-around was possible, with first oil produced as early as 2017.
Brown said there has been strong interest in the project from both overseas and locally as the massive potential of the play becomes more apparent.
“We’re conventional,” Brown explained.
“We’re offshore oil in shallow water and have a shallow reservoir depth which all bode well for economics and that’s the wish list if you want everything.”
“We’ve got drilling activity and big strategic positions so we’d like to think that we have a lot of upside.”
“If this works, it’ll keep the company busy for 20 plus years.”