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How is the NT's moratorium lift working out?

01 Aug 2019 11:29 AM | Sonia Harvey (Administrator)

THE Northern Territory finally approved the first environmental plan since lifting its fraccing moratorium early last year, giving Santos the greenlight for its two-well campaign in the Beetaloo Sub-basin for this year’s dry season.

It has cheered industry but those with unconventional NT acreage are watching especially closely, hoping to ramp up drilling campaigns of their own; however, much land is now designated reserved and off limits permanently to exploration the road isn't clear yet.

Yesterday in its quarterly Origin Energy said it expects drilling approval this month and to that end preparation work continues for its two planned horizontal appraisal wells this year, with a water extraction licence already in hand for its well to target the Kyalla liquids-rich gas play.

Water bores have been drilled and the access road and well pad construction are near built.

Meanwhile for its Velkerri play the water license is in place, while the water board and access roads have been approved, it is just waiting on well pad civils and drilling approval, but did not give an expected date.

Earlier week the Reg Nelson-led Vintage Energy told the market it expected some delays to its planned campaign in the Northern Territory thanks to conservation issues and may now have to wait until next year's dry season.

Nelson likes the distant onshore Bonaparte Basin acreage so much he bought it twice. Once, when heading up Beach Energy in 2014 and then from Beach this February.

Blue Energy, which has NT onshore holdings along with its Bowen and Galilee basin permits in Queensland, said yesterday in its quarterly said it is watching the space closely, especially since Santos was greenlit in July.

Blue has three exploration permits with work permits that have been suspended until February next year.

"The main Beetaloo Basin Operators, Santos and Origin are "road testing" the new Government approvals process for Environmental Management Plans plus the approvals process to drill, frac and test oil and gas wells, which now sit in two different Government Departments," it said,

"If Origin and Santos can successfully drill, frac and test their wells this dry season, it will go some-way to establish the new process as effective, and give the broader industry some confidence that the new legislation and approval process is navigable in a reasonable timeframe.

In its quarterly of yesterday Empire Energy it notes shortly after the end of the June quarter the NT Department of Environment and Natural Resources had accepted the company's 2D seismic environmental management plan for final assessment.

Empire is hoping to gain a better understanding of the same thing both Santos, and Origin Energy and joint venture partner Falcon Oil & Gas are targeting: the Velkerri shale and Empire too thinks approval of Santos' plan has opened the way for drilling this year.

It noted that earlier this year the Federal budget allocated A$8.4 million for feasibility studies of the Beetaloo

"The Federal government recognises that the Beetaloo and McArthur basins have the potential to be a major source of cost-effective gas supply fir the critically supply constrained east coast gas market in coming years," it said.

Empire too will see some of its former acreage potentially off-limits to exploration but has made submissions to the government,

Importantly its "key near term" blocks EP127 and EP(A)188, which target the Velkerri will not affected and it said yesterday its "continuing to progress its exploration programs according to schedule".

Consultancy EnergyQuest has will be watching Santos' and Origin's upcoming campaigns too. Several months ago it published a rundown of wells to watch this year, putting the Beetaloo spuds at the top of its list.

"These are no ordinary onshore wells. Falcon Oil & Gas disclosed last month as part of a US$9 million capital raising that the gross estimated capex for stages 2 and 3 (a total of four wells drilled and fracture stimulated) was US$130 million," it said.  

"The wells in 2019 will go a long way to establishing whether the hype about the Beetaloo is justified. There is plenty of scepticism, due in part to disappointments with unconventional exploration in other Australian onshore basins." 

Source: Energy News Bulletin

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