Australian oil & gas firm gets its hands on two high-potential Gulf of Mexico blocks
Australia-headquartered oil and gas player Prominence Energy has been awarded two adjacent exploration blocks on the U.S. Outer Continental Shelf (OCS), which are located off Texas in approximately 75 metres (250 ft) of water. These blocks cover an area of 11,520 acres (around 46 km2).
According to the company, it placed a bid for these blocks via its newly formed wholly-owned subsidiary, PRM Energy Texas LLC (PRM Texas). As a result, PRM Texas is now the leaseholder for the Brazos Area, South Addition Blocks A87 & A90, lease numbers OCS-G 27241 and OCS-G 37342, respectively. The leases start on 1 July 2023 with an initial five-year term. There is no minimum work programme but the leases have annual rent payments of $57,600 each. These leases can be dropped at any time and can be held by production for 25 years.
Furthermore, the company has mapped and performed AVO analysis on seismic in the blocks and identified a sizeable gas prospect with an area of between 4,000 to 7,500 acres. The AVO analysis shows two sands with Class III AVO anomalies (a strong indication of a gas-filled sand). The main prospect in the blocks has been named Big Apple, which is a Middle Miocene Corsair delta sand deposited between two salt diapirs. The sands are bounded by Upper and Lower Miocene shale prone facies which are likely to provide a good seal.
Prominence Energy explains that the main sand is at a depth of approximately 2,600 m (8,500 ft) interpreted to be up to 46 m thick. The gas column in the steeply dipping sand could be up to 850 m from crest to structural closure while a secondary sand with a similar Class III AVO anomaly above the main sand is interpreted to be 15-20 m thick. The AVO response implies a porosity of 17-25 per cent. The firm explains that this prospect can be drilled using a jack-up rig.
Moreover, Prominence Energy intends to buy the remaining speculative seismic over the prospect, perform detailed mapping work on the prospect, and have the prospective resources assessment independently reviewed by a reserves auditor. In addition, the firm will consider seeking a farm-in partner to participate in the project on a promoted basis and move to the drilling of the project as soon as practical.
Alex Parks, Managing Director of PRM, commented: “PRM is very pleased to have secured the Big Apple prospect blocks with five-year leases. The Big Apple prospect is potentially very material in size and the AVO work indicates prospectivity for gas. PRM holds the leases with a 100 per cent working interest. The forward plan is to perform a detailed technical workup of the prospect and then consider seeking a farm-in partner to participate in and fund the drilling of an exploration well.”
The company believes gas will be used as a transition fuel for decades to come. In line with this, the USA is increasingly investing in liquefaction plants to produce and export LNG and is scheduled to add at least three major facilities that are forecast to be in operation over the next five years. For Prominence, this bodes well for U.S. gas prices in the medium term and makes a substantial gas prospect like Big Apple potentially very valuable if a discovery is made.
Prominence Energy underlined: “Energy sustainability dictates that we must consider the impact of carbon and GHG emissions and alternate energy sources that will allow the company to grow in the medium to long term compatible with social expectations. Gas, in particular, is considered a key transition fuel, but in combination with CCUS is also a long-term energy solution.
“Whilst Big Apple is matured to drillable status, PRM continues to review additional projects across a broad spectrum of types and locations. PRM looks for potential projects that relate to our core business expertise in geology, drilling, and energy technology, including CCUS, hydrogen, helium, and near-term conventional oil and gas farm-in drilling opportunities.”