CENTRAL Petroleum is farming down three Amadeus Basin permits to the private Peak Helium, which will free carry the former for two sub-salt helium exploration wells.
Santos retains its existing share of all the permits.
It marks a return to onshore helium exploration for Santos, which remains operator, whose Bayu Undan field that sends gas to the Darwin LNG plant is set to close in 2023. It is Australia's only commercial source of helium.
Australia's sub-salt basins have always been seen as prospective for helium and more recently native hydrogen, given the thick seals trap the tiny molecules in a way other formations do not.
One will target the 2014 hydrogen find at Mt Kitty by Santos, which never flowed commercial rates of the gas but was considered one of Australia's first native hydrogen finds. Mt Kitty also recorded a 9% helium concentration. Anything over 2% is considered extremely high.
Bayu Undan, conversely, is only 0.1% but its LNG-sized scale makes it commercial.
"The exploration program will also target naturally occurring or "gold" hydrogen which makes up a relatively high 11.5% of the gas found at Mt Kitty-1," Central said today.
Gold is the newest colour added to the expanding hydrogen rainbow. Green is made with water and renewable energy, blue with natural gas and carbon capture and storage for the resulting CO2. Pink is made using nuclear power and water. Grey, black and brown all use hydrocarbons with no solution for the CO2 except to allow it into the atmosphere.
Gold, or native hydrogen, is relatively new but geologists are now working overtime to identify sources. The first discovery was in Mali some years ago. The barrier to hydrogen is the same as helium: the natural gas that makes up the majority of the resource must also have a way to be commercialised.
The other well will be at the Magee of Mahler prospect. Central also plans to move back its long-shuttered Dukas well, which has been chasing a helium resource in the same area since 2018 before mechanical issues led to a permanent shut in around 2019.
Central will farm down 31% of EP82, excluding the Dingo Satellite area, leaving it with 29%. It will also farm down 10% of EP112, dropping from 45% to 35% and 6% of EP125, with its interest to drop from 30% to 24% Mt Kitty is in EP125.
Free carry costs will be capped at $20 million per well, with an effective date of October 1 2021, for two wells both targeting natural gas, helium and hydrogen in the sub-salt structures of the basin.
"Santos has confirmed that it has entered into farmout arrangements with Peak covering their interests in EP82, EP112 and EP125, as well as their interests in EP105, EP(A)111 and EP(A)124," Central said today.
"Central also has interests in the latter three blocks but these are not included in Central's farmout to Peak. There will be no change in Santos' role as operator under the farmout arrangements."
Drilling begins next year.
"The investment by Peak sets a benchmark for the value of this acreage and demonstrates the potential of our sub-salt prospects for natural gas, high value helium and "gold" hydrogen," Central CEO Leon Devaney said today.
Source: Energy News Bulletin
