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ORIGIN ENERGY LIMITED — Capital/Financing Update 2014
Feb 23, 2014
65507_rns_2014-02-23_75358e93-f8c8-4d3c-b1e4-36c183138837.pdf
Capital/Financing Update
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ASX Announcement
Senex and Origin Energy agree Cooper Basin gas farm-out
Release Date: 24 February 2014
Senex Energy Limited (Senex, ASX: SXY) and Origin Energy Limited (Origin, ASX: ORG) have agreed to evaluate tight gas sands in key areas of South Australia’s southern Cooper-Eromanga Basin involving a work program of up to $252 million .
KEY POINTS
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Two farm-out agreements signed providing exposure to tight gas sand, shale and deep coal plays:
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Area A (36% of total areas of PEL 516 and PEL 115 (Senex 100%) and,
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Area B (47% of total area of PEL 514, Deeps only (Senex 80% and operator, Planet Gas Limited (Planet, ASX: PGS) 20%)
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Up to $252 million may be invested by the joint venture partners in a two-stage work program involving the drilling of at least 15 wells and substantial 2D and 3D seismic acquisition programs
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Senex is free-carried for its share of the first $185 million of work program, with Senex, Origin and Planet having the option to contribute a further $67 million on a participating interest basis
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Senex will retain operatorship of the permits during the two-stage work program, with Origin having the option to become operator following completion of Stage 2
FOCUSED ON COMMERCIALISATION
The parties have agreed a two-stage work program totalling $185 million with additional work program expenditure of up to $67 million, which is subject to operating committee approval. The first stage will evaluate the potential of the tight gas sands, provide exposure to shales and deep coal seams, and provide proof of concept. The second stage will evaluate the commerciality of the gas resource by undertaking extended flow testing through separate pilot programs.
Senex Managing Director Ian Davies said Origin is the ideal partner to help commercialise the Cooper-Eromanga Basin’s significant unconventional gas potential.
“Origin has built an unrivalled position in the eastern Australian gas market and has access to international markets through its APLNG export facilities in Gladstone. Origin is a natural partner for Senex to accelerate the commercialisation of a potentially massive gas resource, especially given its long-standing position in the South Australian Cooper Basin Joint Venture.
Senex Energy Limited Head Office ABN 50 008 942 827 Level 14, 144 Edward St, Brisbane Qld 4000 GPO Box 2233, Brisbane Qld 4001
[email protected] senexenergy.com.au
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“These agreements cover 40% of the total area of PEL 514 and PEL 516, with Senex retaining its material interests to explore the remainder of these hydrocarbon rich permits,” he said.
TRANSACTION DETAILS
The following table summarises the transaction, which is conditional on certain approvals including registration of interests. Completion is expected by 30 June 2014.
| AREA A AREA B TOTAL |
AREA A AREA B TOTAL |
AREA A AREA B TOTAL |
AREA A AREA B TOTAL |
|---|---|---|---|
| Total petroleum exploration licence (PEL) areas Farm-out areas |
2,876 km2(PEL 516 and PEL 115) 1,031 km2 (255,000 acres) (36% of total PEL areas) |
1,917 km2 (PEL 514) 904 km2 (223,000 acres) (Deeps only, 47% of total PEL area) |
|
| Stage 1 work program1 Participating interest earned byOrigin |
$65 million 40% |
$40 million 30% |
$105 million |
| Stage 2 work program1 Participating interest earned byOrigin |
$40 million 10% |
$40 million 10% |
$80 million |
| Additional Area B work program Stage 1 and 2 work program (equitybasis) |
N/A | $67 million | $67 million |
| Total workprogram | $105 million | $147 million | $252 million |
1 Senex 100% free carried
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TROUGH
NAPPAMERRI
TROUGH
SKIPTON
TROUGH
ALLUNGA
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AREA A – PEL 516 AND PEL 115
Area A comprises a 1,008 square kilometre portion of PEL 516 and a 23 square kilometre portion of PEL 115 in the southern South Australian Cooper Basin (refer Figure 1 and 3). This will allow operations to focus on the tight gas prospectivity of the Allunga, Skipton and Nappamerri troughs.
The Area A work programs will involve a 300 line kilometre 2D seismic survey, the drilling of up to eight exploration and appraisal wells, fracture stimulation and flow testing. The first well is expected to be drilled within 12 months.
Figure 1: Area A in relation to PEL 516 and PEL 115
Senex Energy Limited Head Office ABN 50 008 942 827 Level 14, 144 Edward St, Brisbane Qld 4000 GPO Box 2233, Brisbane Qld 4001
[email protected] senexenergy.com.au
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ASX Announcement
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TROUGH
NAPPAMERRI
TROUGH
PATCHAWARRA
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Figure 2: Area B in relation to PEL 514
AREA B – PEL 514 (DEEPS ONLY)
Area B comprises a 904 square kilometre portion of the Permian system of PEL 514 ( Deeps ) in the Patchawarra Trough in the northern South Australian Cooper Basin (refer Figure 2, 3 and 4). Senex retains its interests in the oil prone sequences above the Permian ( Shallows ), as shown in Figure 4. The Area B work programs will involve a 250 square kilometre 3D seismic survey, the drilling of up to seven exploration and appraisal wells, fracture stimulation and flow testing.
In Area B, the joint venture parties may elect to fund an additional work program, subject to operating committee approval, totalling $67 million. This will involve additional exploration and appraisal work during both stages.
For further information contact:
Ian Davies
Managing Director Senex Energy Limited Phone: (07) 3837 9900
Andrew Barber Investor Relations Manager Senex Energy Limited Phone: (07) 3335 9821 or 0418 783 701
About Origin Energy Limited
Origin (ASX: ORG) is the leading Australian energy company focused on gas and oil exploration and production, power generation and energy retailing. A member of the S&P/ASX 20 Index, the company has more than 6,000 employees and is a leading producer of gas in eastern Australia. Through Australia Pacific LNG, its incorporated joint venture with ConocoPhillips and Sinopec, Origin is developing one of Australia’s largest CSG to LNG projects based on Australia’s largest 2P CSG reserves base.
About Senex Energy Limited
Senex (ASX: SXY) is an S&P/ASX 200 energy company with a diversified portfolio of oil and gas assets in Australia’s Cooper, Eromanga and Surat Basins. The Company is an experienced operator in Australia’s oil and gas industry and has attracted a highly qualified team of professionals to grow the business safely and efficiently.
Senex Energy Limited Head Office ABN 50 008 942 827 Level 14, 144 Edward St, Brisbane Qld 4000 GPO Box 2233, Brisbane Qld 4001
[email protected] senexenergy.com.au
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Figure 3: Location of Area A and Area B in relation to Senex permits in the Cooper-Eromanga Basin
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TROUGH
NAPPAMERRI
TROUGH
SKIPTON
TROUGH
ALLUNGA
TROUGH
PATCHAWARRA
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Senex Energy Limited Head Office ABN 50 008 942 827 Level 14, 144 Edward St, Brisbane Qld 4000 T +61 7 3837 9900 GPO Box 2233, Brisbane Qld 4001 F +61 7 3837 9999
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senexenergy.com.au
ASX Announcement
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Figure 4: Stratigraphic column highlighting the Deeps and Shallows of Area B
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AGE STRATIGRAPHY LITHOLOGY DEPOSITIONAL
ENVIRONMENT
Ma SW NE
0.8
1.6 Quaternary EARLY TO MIDDLEPLEISTOCENE Millyera Formation &equivalent Fluvial & lacustrine
LATE Yandruwantha Sand
PLIOCENE
3.3
EARLY
PLIOCENE
5.3
MIOCENE & Namba Formation Lacustrine
LATE OLIGOCENE
29.3
EARLY OLIGOCENE
& LATE OLIGOCENE
38.0
Fluvial & lacustrine
LATE PALEOCENE
& MIDDLE EOCENE Eyre Formation
60.0
EARLY
PALEOCENE
MAASTRICHTIAN
88.0 CAMPANIAN
90.0
TURONIAN Winton Formation Non-marine
97.5 CENOMANIAN Mackunda Formation A M Marginal marine
100.0 OodnadattaFormation Allaru Mudstone A 1 MarineRestricted marine
108.0 ALBIAN Toolebuc Formation
Coorikiana Sandstone Wallumbilla Open marine
APTIAN Bulldog Shale Formation
117.5 BARREMIAN Wyandra Sandstone Member C
HAUTERIVIAN Non-marine to
Cadna-owie Formation mariginal marine
VALANGINIAN Murta Formation D M Lacustrine turbidites
145.0151.0159.0165.0175.0 KIMMERIDGIANOXFORDIANRYAZANIANCALLOVIANVOLGIAN SandstoneMcKinlay MemberNamur Westbourne FormationAdori SandstoneFormationBirkhead DHE N Lacustrine shorefaceBraided fluvialLow energybraided fluvialFluvio-lacustrine backswamp
BATHONIAN Hutton
BAJOCIAN- Formation Braided fluvial
186.0188.0 AALENIAN J L
SINEMURIAN- Poolowanna Meandering anastomosing
193.0 TOARCIAN Formation L fluvial
205.5 HETTANGIANRHAETIAN Cuddapan Formation Flood plain, meandering fluvial
218.0 NORIAN
236.5 CARNIANLADINIAN Wimma Tinchoo Formation N Fluvio-lacustrine
242.0 ANISIAN Sandstone Member Braided fluvial
246.0 SCYTHIAN MemberPaning FormationArrabury Flood plain, meanderingstream and lacustrine
Callamurra
Member
249.0 TARTARIAN P Meandering fluvial deltaic
KAZANIAN Toolachee Formation in part
253.5
256.0 UFIMIAN Daralingie Formation R Fluvio-deltaic
263.5 264.5 KUNGURIAN Epsilon FormationRoseneath Shale USVT LacustrineFluvio-deltaicLacustrine
ARTINSKIAN Murteree Shale
Fluvio-deltaic
SAKMARIAN Patchawarra Formation Flood plain
Peat swamp
274.0 ASSELIAN W
277.0 Tirrawarra Sandstone X Pro-glacial outwashBraided fluvial
280.0 LATE Merrimelia Formation Terrestrial & subaqueousglacigene
285.5 Z
WARBURTON BASIN
BASIN SEISMIC CODES
LAKE EYRE BASIN
TERTIARY
(CALLABONA SUB-BASIN)
LATE
MARREE
CRETACEOUS EARLY SUBGROUP
SHALLOWS
LATE Algebuckina Sandstone EROMANGA BASIN
MIDDLE
JURASSIC
EARLY
LATE
M
TRIASIC GROUP
EARLY
NAPPAMERRI
LATE
PERMIAN EARLY COOPER BASIN
GIDGEALPA GROUP DEEPS
CARBON- IFFEROUS
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Senex Energy Limited ABN 50 008 942 827
Head Office
[email protected] senexenergy.com.au
Level 14, 144 Edward St, Brisbane Qld 4000 GPO Box 2233, Brisbane Qld 4001
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T +61 7 3837 9900 F +61 7 3837 9999