MEO Australia Releases Independent Assessment of Marina Discovery and Breakwater Prospect

MEO Australia Limited releases the findings of an independent report by Senergy (GB) Limited (“Senergy”), commissioned by MEO to provide a preliminary volumetric assessment of the Marina-1 gas and liquids discovery and the Breakwater prospect in its 100% owned WA-454-P, in the Joseph Bonaparte Gulf, offshore Western Australia.

Background

MEO was awarded WA-454-P on 14th June 2011 as part of the 2010 gazettal round. The Permit contains the 2007 Marina-1 gas discovery, drilled by ExxonMobil and Drillsearch. On 14th January 2012, MEO awarded a contract to CGGVeritas to acquire the 601 km2 Floyd 3D seismic survey over the Marina discovery, the Breakwater prospect and two additional leads. Concurrent with the 3D seismic acquisition, MEO commissioned Senergy to prepare an independent assessment of the Marina discovery and Breakwater prospect based on the existing 2D seismic and well log data.

Marina gas and probable oil discovery

Senergy concluded that Marina-1 contains contingent resources in up to 5 zones:

• Gas is considered “proven” in Zones 1, 2, 3 & 4, however only “possible” in Zone 5.

• While oil is not “proven”, it is considered “probable” in Zone 1 and “possible” in Zone 2.

• Oil is also considered “possible” in Zone 4, however no volumes were assessed.

These resources are classified as “Contingent” since Marina is yet to be demonstrated to be commercial.

Breakwater Exploration Prospect

The Breakwater prospect is a large, 4 way dip closed structure with an Early Permian Keyling sandstone reservoir objective. The trap is interpreted to be the response to a salt swell structure originating in the late Permian to early Triassic, and is therefore analogous to Blacktip, Petrel and Tern which are also salt related structures. Breakwater has been mapped on existing 2D seismic. Senergy expects the newly acquired Floyd 3D survey will significantly reduce prospect risk.

Seismic amplitude brightening is observed at reservoir level on several lines with one bright zone extending from the structural crest to the southwest and another on the footwall block of the main fault. The edge of the strong amplitudes corresponds to the lowest closing contour, both on hanging and footwall blocks. This could be indicative of hydrocarbon presence and the planned new 3D data will be critical in further assessing the significance of this encouraging DHI effect.

The most likely hydrocarbon phase is uncertain at Breakwater and consequently two scenarios, a gas and oil and a gas only case, have been considered. The un-risked volumes for both are summarised below with their associated Chances of Geological Success (COS) risk factors.

Possible commercialisation paths include a stand-alone development, or a tie-in to the existing Blacktip (957 Bscf) production facilities supplying domestic gas to the Northern Territory, or the proposed Floating Liquefied Natural Gas (FLNG) project under consideration to develop the Petrel (970 Bscf) and Tern (468 Bscf) gas fields, subject to mutually acceptable commercial terms.

MEO’s CEO and MD Jürgen Hendrich, commented on the announcement:

“The addition of contingent resources to our portfolio represents a key milestone in the evolution and growth of MEO. The probable occurrence of oil in the permit is particularly encouraging, especially given the size and potential of the Breakwater prospect under a mixed oil/gas scenario.

Since being awarded the permit in mid-2011, MEO has fast-tracked its technical evaluation including an independent resource assessment and accelerated 3D seismic program by two years. We are aiming to be in a position by year end to attract a funding partner to drill an appraisal well on Marina seeking to confirm oil and also test the potential of the Breakwater prospect.”

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Subsea World News Staff , February 29, 2012;  Image: MEO Australia