Offshore Sydney Basin (NSW) PEP 11

A literature review has resulted in a number of key studies being identified which were produced by prior tenement holders Santos and Ampolex.

"Santos (1991) identified a total 10 structural leads in the PEP 11 offshore area and these were associated with four distinct structural provinces"

"Based on the 15m net pay in each a total of 975 BCF of gas in-place and 620 BCF of sales gas reserves were identified by Santos (1991)"

"Ampolex (1992) identified the Baleen South Lead
as one of their major targets"

For the full background, click here Santos Report

MEC Resources has been granted an option which will allow investee company Advent Energy to acquire up to an 85% interest in PEP 11, an oil and gas permit located in the Offshore Sydney Basin from Bounty Oil and Gas NL (Bounty).

The Offshore Sydney Basin is an untested basin situated along the heavily populated and industrialised central coast of New South Wales. No drilling has taken place in the basin, despite a significant number of wells drilled in the adjacent Onshore Sydney Basin, which have flowed gas or encountered oil shows.

Covered by PEP 11, a 200km long, 8,100km2 permit, the Offshore Sydney Basin is a significant exploration area with large scale structuring and potentially multi-Tcf gas and condensate-charged Triassic and Permian reservoirs.

Mapped prospects and leads within the Offshore Sydney Basin are generally located less than 50km from Australia's largest energy market, the Sydney-Wollongong-Newcastle greater metropolitan area. This area has a population of approximately 5,000,000 people. Traditionally, all natural gas used in New South Wales has been piped in from South Australia and the Bass Strait. However, studies by the Australian Bureau of Agricultural and Resource Economics (ABARE) and the Australian Petroleum Production and Exploration Association (APPEA) state that those sources may not be able to meet the demand for gas in the medium to longer term.

The combined total prospective recoverable resources for the permit's 6 prospects and leads is estimated to be 16.3 Tcf (P10) of gas. Economic estimates indicate that even small gas accumulations of less than 200 Bcf recoverable can be commercial in the current price environment.

Although there have been over a thousand wells drilled in offshore Australia, no exploration drilling has ever taken place in the offshore Sydney Basin.

The prospectivity of the northern sector has been further enhanced by the confirmation of the presence of apparent ongoing hydrocarbon seeps. Originally detected on 1996 satellite imagery, a repeat analysis of 1998 and 2001 images again identified apparent seeps directly over the main prospect.

In 2004, a 1,460km Baleen 2D Seismic Survey was conducted in the northern sector of the permit. This was the first seismic data to be acquired in the area for over 13 years. The data confirmed two prospects.  Four other large leads, each with approximately 200-600 Bcf (P10) of prospective gas reocvery have also been identified elsewhere in the permit.  Additonal seismic will be required to mature these to a drillable status. Advent is currently negotiating to secure a rig slot with the view to drilling as soon as possible.

Sydney Basin

The basins around Sydney have been known to be coal bearing for nearly two centuries. Coal has been mined for 175 years from the Newcastle coalfields in the Hunter Valley area while more recently several companies have successfully produced coal bed methane in the Sydney Basin onshore.

Between the turn of the last century and 1970 over 80 exploration wells were drilled here. Records from 68 of these were reviewed by Sydney Oil Company which noted that 41% had flowed gas. Two oil exploration wells completed in 2000, Glenmore-1 and Fairlight-1, both found residual oil shows in Triassic and Permian sandstones at depths ranging between 580m and 830m. Recently there has been a resurgence of activity with a number of companies successfully drilling for, and developing, coal bed methane reserves onshore.

The main reservoir targets are the Late Permian's Muree Sandstone Member, which is sealed by the Mulbring Siltstone, and the deeper Greta Sandstone, which is sealed by shale in the Branxton Formation. Both of these sealing strata are also considered potential wet gas-prone source rocks that may be mature in the Newcastle Syncline present day.

Structural elements of the Sydney Basin.

The Offshore Sydney Basin is one of the largest remaining unexplored prospects for oil or gas in Australia, with no drilling having taken place despite a significant number of wells drilled in the adjacent Onshore Sydney Basin, which have flowed gas or encountered oil shows. New South Wales is unique among the mainland states of Australia in having no identified commercial reserves of natural gas within its borders or in adjacent waters. Gas supplies to the New South Wales energy market are small compared to the market potential.  Energy requirements have largely been met by high quality coal and gas piped from neighbouring states. The NSW Government is keen to develop and expand the supply of cleaner energy sources, especially gas.

Covered by PEP 11, a 200km long, 8,100km2 permit, the offshore Sydney Basin is a significant exploration area with large scale structuring and potentially multi-Tcf gas and condensate-charged Permian reservoirs. Oil has been recorded from some 55 locations within the onshore basin. These occurrences include oil shows, oil bleeding from core, oil staining, and flurescence in core.
 

                                 

A significant amount of geological and geophysical work has been carried out, improving the understanding of the Sydney basin. Integration of 1981, 1991 and 2004 seismic data for the first time has confirmed the Baleen and Fish prospects as constituting very large prospective structures. Naturally occurring oil slicks inshore have been a known phenomenon for decades and Landsat seep data shows repeated seeps occur over the Baleen prospect. Thus although gas is the initial focus, the possibility of a new oil play offshore cannot be ruled out.

Recently reported continental margin seepage and inshore thermogenic methane gas seepage has demonstrated an active hydrocarbon system.