Australia: WHL Energy Mobilises Seismic Vessel CGG Viking II for La Bella Survey

Australian energy company WHL Energy Limited (“WHL Energy” or “the Company”) reports that the seismic vessel the CGG Viking II has mobilised to the Otway Basin and is currently deploying its equipment.

The La Bella 3D Marine Seismic Survey (MSS) in offshore Otway Basin permit VIC/P67 is expected to commence around 15 November, once the Viking II has completed a smaller survey for Origin Energy. The La Bella survey will cover a total of 867 sq. kms and is expected to take 34 days to complete. WHL Energy is Operator of the seismic survey.

CGG’s state-of-the-art broadband seismic surveying technology (BroadseisTM) technology will be employed in order to provide a high resolution image of the subsurface geology of La Bella gas field and surrounding exploration prospects. The survey is also being undertaken in an area of high environmental and community sensitivity and as such WHL Energy has undertaken stringent measures to meet the regulatory obligations and respect the community expectations to protect the environmental and community interests in the area.

Processing of the data recorded by survey is scheduled to be undertaken during January through to April 2014. An initial data volume is expected mid-February, with interpretation anticipated to commence immediately thereafter. The final processed data is targeted to be received in mid-May and a final interpretation will follow.

The acquisition of the La Bella 3D Marine Seismic Survey is an important step in advancing the development of the La Bella gas/condensate field, and importantly, also maturing the exploration prospects in VIC/P67 for drilling. The technical objectives of the survey are to provide an accurate image of the subsurface structure and the reservoir properties and also to quantify the distribution of gas in the La Bella field and nearby prospects. This will provide a basis for field development planning for La Bella that targets production in 2017. A drilling program is being planned by for Q1 2015.

Concept Evaluation Studies

WHL Energy and its Joint Venture partner, AWE, are also in the process of commissioning detailed development concept evaluation studies with an external engineering contractor. These studies, along with the La Bella 3D seismic survey data, will evaluate in detail, the engineering and costs associated with the potential development of the La Bella gas resource through each of the offset facilities, being the Casino, Minerva and Geographe/Thylacine projects.

Seychelles Asset

The company is in the midst of an active farmout campaign for its Seychelles asset with interest being received from a number of industry participants. The data room process is being run in both the Perth office and London office of the Company’s appointed advisor for the process RFC Ambrian. The company is seeking to conclude binding agreements in January 2014 subject to regulatory approval by PetroSeychelles.

A recent reinterpretation on mapping by the company of the Beau Vallon structure has identified a deep prospect with a mid-case prospective resource of 10 trillion cubic feet (Tcf) of gas. A large closure of some 150 sq. km area and 500m relief is mapped in the Karroo section on the structure at approximately 4000m depth.

WHL Energy Managing Director, David Rowbottam said: “The commencement of operations in preparation for acquiring the La Bella 3D seismic survey is an exciting time for the Company. This is a critical step in the development of the La Bella asset and its progress towards eventual development and production. This data will firm-up the Contingent Resources in the La Bella field and just as importantly the high resolution seismic data acquired will firm up the potential of the surrounding exploration prospects for which WHL Energy carries a P50 Prospective Resources of some 577 Bcf, that if proven will have a material impact on the value of the La Bella block.

“The La Bella project is financially important to the Company as it will provide long term returns. Once in production, a 25% share of the project will generate approximately $25 million NOPAT (net operating profit after tax) per year.

“A production plateau of 4 years is expected for the La Bella project in the base case, and the projected cash flow will be transformational for the Company. This is not reflected in WHL Energy’s current market capitalization as judged by recent research reports.”

“Regarding our Seychelles asset, we continue to get significant industry interest and a number of companies are currently evaluating various farm-in proposals for our areas. The identification of a large deep gas prospect on the Beau Vallon structure also points to the ongoing potential for new exploration plays to emerge from this exciting frontier area. Our Seychelles project is a unique opportunity for a basin opening play in an East Africa setting with significant upside potential and accordingly is highly valuable to the company.”

“This is a very exciting time for the Company and its supporters. Successful farm-outs have been reached that provide the majority of the funding for the La Bella seismic survey. Work is also well underway to progress farm-out negotiations related to the Seychelles project with the aim to acquire seismic in 2014.”

Press Release, November 06, 2013; Image: CGG