Mosman Oil & Gas Limited (AIM: MSMN), the Australia and New Zealand focussed oil exploration and development company, advises that it has entered into an agreement to acquire the entire issued share capital of OilCo Pty Ltd (“OilCo”), a wholly owned subsidiary of High Peak Royalties Limited (‘HPR”) (formally Torrens Energy Limited).
The Amadeus Basin is considered one of the most prospective onshore areas in the Northern Territory of Australia for both conventional and unconventional oil and gas, and hosts the producing Mereenie, Palm Valley and Surprise fields.
John W Barr, Executive Chairman of Mosman commented: “With Mosman’s strategy to develop oil and gas assets in Australia and New Zealand, this opportunity and commercial terms fit well within our stated growth strategy. The OilCo assets in the Amadeus Basin provide a natural complement to Mosman’s Australian exploration assets and are located in a prospective region that is experiencing a surge in exploration and development activity.”
For the eleven months ending 31 May 2014 OilCo had an unaudited net asset value of A$730,000 and a total comprehensive loss for the period of A$5,445.
Overview of OilCo Assets
EP156 Eastern Amadeus
Located in the Northern Territory of Australia, EP156 covers an area of 4,262 sq. km and is granted for a term of five years. EP156 currently has no defined Prospects although there are several leads and an area of unconventional hydrocarbon potential. The licence is in its second year and contains three synclines comprising largely of Cambrian-Ordovician age rocks. Ordovician age reservoirs are responsible for the commercial production within the Amadeus Basin. A report by independent consultants SRK Consulting (Australasia) Pty Ltd (“SRK”) states that, ‘EP156 likely contains significant and strategically located unconventional hydrocarbon potential, associated with the Palaeozoic shales plus additional hydrocarbon potential exists in the form of conventional anticlinal closures in the Neoproterozoic rocks observed from surface outcrop mapping.’
Significant gas fields that are located south west of EP156 are:
– The Dingo Gas field, discovered in 1981 is 65kms SE of EP156, and has currently30.1 PJ reserve (e.q. 5.1MMBOE), production license was granted recently and a new 50km pipeline is being built; and
– Central Petroleum Limited has gas discoveries that flowed-to-surface at Ooraminna and is 35kms SE EP156. It also displayed a Helium credit in excess of 4%. Rodinga was also an oil show, and was in the vicinity of the EP156.
A number of prospective leads have been outlined by SRK on EP156:
– Conventional anticlines: two anticlines identified in the east of the tenement;
– Salt deformation structures are part of the frontal Arltunga Nappe Complex. This zone comprises deformed Bitter Spring Formation (Gillen Salt Member) overlying Heavitree Quartzite;
– Shale gas plays: Giles Creek Dolomite and Chandler Formation, Shannon Formation, Pertatataka, Aralka, Areyonga and Bitter Springs Formations; and
– Aralka/Pioneer Unconventional Play (currently identified in EP156).
EP(A)155 Mount Winter
Located 135 km from EP156, within the prime Horn Valley Siltstone fairway between the Mereenie and Surprise Oil Fields, EP(A)155 covers 378 sq. km and contains the historical wells Mount Winter 1 and 1A that reported oil shows1. Seismic and well data comprise limited 2D seismic lines and two wells, one with oil shows. These oils shows were recorded within two formations:
– The first trap with oil shows was in the Stairway Sandstone. The Stairway is the production layer (reservoir) at Surprise 1REH1. These tight conventional formations with good porosity but low permeability can flow-to-surface with new technology, and in particular multi-staged stimulation and horizontal drilling; and
– A second trap was discovered in the Bitter Springs Formation determined to be of the Johnny Creek Beds petroleum bearing unit. Oil shows here again were not flowed to surface as the technology to do so did not exist.
There are also deeper formations which were not tested such as the Pacoota and deeper plays.
EP(A)155 is an exploration permit application; as such it is subject to successful land access negotiation with the Traditional Owners prior to the grant of the permit.