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Northern Territory

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  • 26 Aug 2020 2:39 PM | Sonia Harvey (Administrator)

    EMPIRE Energy has raised A$10 million through a placement to fund its upcoming drilling campaign in the Northern Territory’s Beetaloo Sub-basin.

    The placement to institutional and sophisticated investors was offered at 30 cents per share, doubling its cash in the bank to A$20 million. 

    Empire is planning to drill its Carpentaria-1 in permit EP187 next month, using a Schlumberger rig. 

    Empire managing director Alex Underwood said he was "pleased with the strong level of support" from the capital raise. 

    "Empire is now well funded to progress its planned work programs across its extensive holdings in the Beetaloo and McArthur basins," Underwood said. 

    "We believe [our tenement] will create substantial value for our shareholders, broad and sustainable economic benefits to the people of the Northern Territory, and energy security for Australia and the broader region." 

    Civil works, including well pad construction, and water bore drilling began earlier this month. 

    The Carpentaria-1 exploration well will be a vertical well drilled to a depth of 2900 metres and targeting the Velkerri Shale Formation. 

    Contractor InGauge, and Empire Energy, have designed the well to include an extensive evaluation program consisting of coring which will give valuable insight into the geology of the target formations.

    This data would then form the basis of the next phase work program and recoverable volumes of oil, gas and liquids.

    Independent certifiers Netherland Sewell and Associates gave its permit EP187 a best estimate prospective resource of 13.6 trillion cubic feet of gas, with 2.3Tcf in the Velkerri Shale and 14 million barrels of oil equivalent in the Kyalla shale.

    Source: Energy News Bulletin

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  • 25 Aug 2020 2:56 PM | Sonia Harvey (Administrator)

    ASX-LISTED oil and gas contractor GR Engineering, which provided services to Northern Oil & Gas Australia at the Laminaria and Corallina oilfields in the Timor Sea, has posted a A$9.7 million loss before tax in its full year results today.

    GR Engineering provided services to the now liquidated NOGA for its Northern Endeavour floating production storage and offloading vessel which produced oil from the two fields.

    However, an impairment to its subsidiary Upstream Production Solutions saw writedowns of about $17.6 million when NOGA went bust and ultimately fell into receivership and then liquidation. 

    "The financial year 2020 results were negatively impacted by the impairment of an outstanding receivable owed by Timor Sea Oil & Gas Pty Ltd," GR managing director Geoff Jones said. 

    Timor Sea Oil & Gas was one of four subsidiaries operated by NOGA. 

    Despite the negative impact of the NOGA liquidation the company still posted revenue of $222.4 million with underlying EBITDA of $11.3 million. 

    At June 30 the company had $37.5 million cash in the bank. This was up significantly from the $20.7 million it had in the bank at December 31 2019. 

    Jones called the company's position "well capitalised" and noted its 2021 pipeline of new work was worth around $170 million. 

    Source: Energy News Bulletin

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  • 25 Aug 2020 2:40 PM | Sonia Harvey (Administrator)

    A RECENT report from the Institute for Energy Economics and Financial Analysis (IEFFA) has warned that a lack of government funding along with inaction around policy settings means that Australia could lose its leading position as a future hydrogen powerhouse.

    The report titled Great Expectations followed the unveiling of Europe's Hydrogen Strategy - largely based on green hydrogen production - but focuses on the role that Australia and Asia more broadly will play in the future energy export space. 

    According to IEFFA financial analyst Yong-Liang Por there are around 50 viable hydrogen projects announced over the last financial year, with a total capacity of 4 million tonnes of renewable hydrogen per annum and a power capacity of 50 gigawatts. 

    "The biggest projects are being planned for Australia and the Middle East, as economies of scale are required for export-orientated plants," Yong-Liang Por said. 

    While Australia is poised to take advantage of its proximity to Asian gas markets, there is however a "serious risk" that some projects may fall by the wayside due to "unfavourable economics and a lack of financing" along with government planning. 

    "Governments need to urgently back this industry by developing policy settings encouraging private industry to invest the much needed capital, given the industry must ‘learn by doing'," Por said. 

    Por said Australian policy makers needed to ensure a future hydrogen economy and robust export market based on hydrogen would require transitioning ports from coal to hydrogen. 

    "With the green hydrogen industry still in its infancy, it is important for ports to move quickly to establish themselves as a hydrogen centre through promotion as a usage, production, import and trading hub," Por said in his report. 

    These ports, in Queensland and Western Australia, are already close to potential production sites for hydrogen plants. Key markets would include Japan, Korea and Europe, already important markets for Australia's current energy exports. 

    According to the report, Australia's exports of hydrogen were more likely to come in the form of liquified hydrogen, owing to the country's already well-established LNG expertise and infrastructure. 

    Hydrogen must be stored at minus 253°C versus LNG at minus 163°C, calling for tankers with more sophisticated insulation.

    Creating a large enough fleet in time to beat other countries is ambitious, although IEFFA noted Japan had begun building its first liquified hydrogen gas tanker in December last year. 

    Trials of liquified hydrogen cargoes are expected to begin by March next year. 

    Por noted that Australia had the "most ambitious" hydrogen export plans but initial projects were backed by companies with a "lack of resources" to drive successful completion. 

    This is despite BHP and Woodside Petroleum being shortlisted for the Australian Renewable Energy Agency's $70 million hydrogen funding round. AllianceBernstein noted last week the two were some of the earliest movers in the oiler space

    "In Australia at present, most hydrogen ventures are pilot projects and are regulated on a case-by-case basis without the need for lengthy formal assessment and approval processes," Por said. 

    That said if these pilot projects are successful, it would be likely that public consultation and further assessments would be needed, which would in turn lengthen project delivery schedules. Australia by no means is ready to win the hydrogen export race. 

    Source: Energy News Bulletin

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  • 21 Aug 2020 3:05 PM | Sonia Harvey (Administrator)

    SANTOS reported a profit drop of almost 50% yesterday and a share price fall of over 4% but CEO Kevin Gallagher charted a way forward even after project deferrals, capital spend cut and write downs.

    This  included confirmation of a three-well infill campaign at the Bayu Undan field first flagged in its second quarter results, which Santos expects to extend the legacy gas field's life out to 2025. 

    Santos will drill two platform wells and one subsea well with sanction planned for the end of the year, Gallagher said.  

    It will be the first campaign drilled with Santos as operator of the offshore asset, which is now fully under Timor-Leste jurisdiction since the small nation ratified the maritime boundary treaty with Australia last year.  

    It will also provide ongoing revenue to the nation given royalties from the field are its single largest source of revenue. 

    This  included confirmation of a three-well infill campaign at the Bayu Undan field first flagged in its second quarter results, which Santos expects to extend the legacy gas field's life out to 2025. 

    Santos will drill two platform wells and one subsea well with sanction planned for the end of the year, Gallagher said.  

    It will be the first campaign drilled with Santos as operator of the offshore asset, which is now fully under Timor-Leste jurisdiction since the small nation ratified the maritime boundary treaty with Australia last year.  

    It will also provide ongoing revenue to the nation given royalties from the field are its single largest source of revenue. 

    Source: Energy News Bulletin

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  • 21 Aug 2020 2:57 PM | Sonia Harvey (Administrator)

    ORIGIN Energy and its joint venture partner Falcon Oil & Gas are heading back to the Beetaloo, months earlier than first anticipated when the COVID-19 pandemic hit Australia.

    The venture was forced to abandon fraccing plans and then completion of the Kyalla-117 appraisal well earlier this year after the pandemic led to movement restrictions and hard border closures. 

    Kyalla has been labelled an exciting ‘well to watch' by many in the industry. 

    Yesterday, the junior stakeholder Falcon Oil & Gas (22.5%) said the two companies would restart activities at the wellsite within months. Origin also mentioned its intention to be back in the region by the end of the year in its latest financial report

    Subject to another breakout of coronavirus in the NT, Origin and Falcon plan to frac the well within this quarter or next. 

    Once fraccing is completed, an extended production test will follow. The results of this test are expected late this year, or potentially early next. 

    The test will form the basis of a commercialisation plan and future exploration for liquids and gas in the Velkerri formation across the basin. 

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    "We look forward to the next phase of operations with the fracture stimulation of the Kyalla-117 well and will update the market as results become available," Falcon chief Philip O'Quigley said. 

    Falcon sold down a further 7.5% interest to operator Origin in April, an agreement aimed at cutting the junior partners' costs. 

    Under the agreement Origin will carry Falcon for a further $25 million worth of future work at the well. 

    Kyalla-117 was drilled to a total depth of 3809 metres with a 1579 lateral section in February. 

    During drilling elevated gas shows with relatively high liquids were observed in all three of the target reservoirs encountered. 

    If the well proves as commercial as the venture expects, there are multiple commercialisation opportunities, including the Amadeus to Moomba pipeline announced just yesterday by Australian Gas Infrastructure Group and Macquarie.

    The new $1 billion pipeline will see gas from the NT piped directly to Santos' Moomba gas supply hub in South Australia. 

    Source: Energy News Bulletin

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  • 21 Aug 2020 12:10 PM | Sonia Harvey (Administrator)

    "Territory Story" is a popular podcast run by Peter Gowers (Oppidanus Digital Marketing) and Leon Loganathan (Ward Keller). 

    118. Stephanie Stonier - Fracking in the Territory

    125. Stephanie Stonier - Response to Terry Mills on Fracking

    Stephanie Stonier is the Corporate Affairs Manager (Northern Australia) for Origin Energy. Stephanie now has two podcasts online with Territory Stories including her personal story and how she has been involved in industry followed by her response to 

    Born in Perth, Stephanie is the daughter of a Vietnam Veteran. Growing up, she suffered heart palpitations than were eventually identified in her twenties as associated with the possible effects of Agent Orange.

    Stephanie went to work for Rio Tinto including a stint in Mongolia before taking on the role with Origin Energy and being the face for the company’s commitment to fracking in the Northern Territory.

    On these episodes of Territory Story, she speaks candidly about her life and her role in promoting the science and the benefits of fracking.

  • 19 Aug 2020 3:15 PM | Sonia Harvey (Administrator)

    CENTRAL Petroleum will send gas from its Amadeus Basin gas fields in the Northern Territory to the east coast gas market through a new proposed pipeline to be developed by Australian Gas Infrastructure Group and Macquarie.

    Yesterday after markets closed, Central told shareholders it had signed the agreement with AGIG which would see the company ramp up production from its three currently producing gas fields and pipe the gas to Santos' Moomba gas supply hub in South Australia through a new pipeline. 

    Central will drill a series of development wells across the Mereenie, Palm Valley and Dingo gas fields, and also upgrade and debottleneck its existing infrastructure. 

    The pipeline is an answer to one of the most complicated commercialisation challenges across the onshore NT region, allowing gas produced from the central NT to reach the east coast gas market which is facing gas supply shortfalls by 2024.

    Currently gas produced from the onshore NT is piped more than 2200 kilometres through a pipeline that connects to Mount Isa and then doubles back on itself to Moomba. The Northern Gas Pipeline is owned and operated byJemena. 

     

    This new pipeline proposed by AGIG will be "less than half" that distance, about 950km, and make piping gas to Moomba significantly cheaper, according to AGIG. It would cost more than $1 billion. 

    The pipeline will have a 16-inch diameter and have the capacity to pipe 124-terajoules of gas per day with an option to expand that capacity with compression. 

    "We are delighted to partner with Central Petroleum and Macquarie Mereenie by signing a memorandum of understanding for the development of this significant new pipeline," AGIG chief Ben Wilson said. 

    AGIG is owned by Hong Kong-based CKI Group, which was nixed from buying fellow pipeliner APA Group by newly appointed Treasurer Josh Frydenberg in 2018 over foreign investment concerns. 

    Wilson noted the pipeline development would be a major piece of infrastructure for gas markets in the NT and Eastern Australia. 

    Not only is it good news for Central Petroleum in the Amadeus Basin, but an important development for all onshore regional players including Santos, Empire Energy, and Origin Energy which are all planning major gas exploration and appraisal in the nearby Beetaloo Sub-Basin, which an expansion could connect it to. 

    It will allow Santos to connect its Dukas well, which it also shares with Central Petroleum, to the east coast gas market, a major win for the NT gas hopeful. 

    Work on front-end engineering and design has already been conducted, as part of a process AGIG completed in 2015. A final investment decision will be made in the second half of next year. 

    Construction would then begin in 2022 with first gas deliveries by 2024. This would be the same year the Australian Energy Market Operator expects major gas supply shortfalls and a stark lack of gas across the east coast.

    Source: Energy News Bulletin

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  • 12 Aug 2020 2:47 PM | Sonia Harvey (Administrator)

    THERE is great uncertainty as to how oil and gas companies will adapt to the hydrogen era given there are many synergies but a move to carbon-free gas, transport and heating will also ultimately hasten the end of the fossil fuel era.

    A comprehensive report from AllianceBernstein this week notes that only certain companies will adapt, and among those globally are Australia's Woodside Petroleum and Santos.  

    It sees Equior as the most progressive, but notes Shell, BP and China's Sinopec have announced hydrogen strategies also.  

    However, hydrogen will have no impact on near term earnings, it says.  

    Woodside has made a series of recent hydrogen investments including fuel cell charging stations in South Korea and green ammonia, which can be used as a carrier of green hydrogen as an alternative to liquefaction -- which occurs at a far cooler -260 compared with natural gas' -160 - and Santos has a carbon capture and storage project and associated hydrogen plans. 

    "Oil & gas companies, gas utilities, and automotive manufacturers are some of the industries most threatened by hydrogen. Those that embrace the energy transition may survive and even thrive, while those that do not risk being confined to history," it said.  

    Overall hydrogen may finally play a major role in future decarbonisation after several false starts as costs fall and the cost of green hydrogen in particular -- which is made via using renewable energy to split water into its two components -- falls to US$2 per kilo and fuel cell costs to $30 per kilowatt from $200/kW now.  

    "Investment in hydrogen will likely be enormous, but so will revenues, with over $1.2 trillion in annual revenue from hydrogen by 2050. Transport will likely be the most material at $350 billion, followed by industrial energy at $260 billion and building heating and power with $180 billion in revenues," it said. 

    Source: Energy News Bulletin

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  • 11 Aug 2020 3:17 PM | Sonia Harvey (Administrator)

    AUSTRALIAN onshore oil and gas explorer Armour Energy has paid down a note facility and shored up its bank account through a divestment and funds from a farm-in agreement with Santos.

    Armour Energy chief Brad Lingo told shareholders the company would pay A$5.3 million in early principal amortization payments and expected the ASX-listed business to receive $10 million through asset transactions by the end of this month.

    "The company is delivering on the equity raise target and will shortly receive the $10 million in asset transactions," Lingo said. 

    It will receive $4 million through the sale of its interest in production license PL1084. Armour had a 10% stake in the CSG license known as the "Murrungamba Block" and announced it was selling it to Australia Pacific LNG earlier this year. 

    A further $6 million is expected to be received this month from Santos - which is farming-in to six permits in the South Nicholson Basin. 

    Under the agreement Santos will make a one-off cash payment of A$6 million and then carry the junior partner for around $65 million worth of exploration costs. 

    With a significant amount of cash to hit the bank accounts in the short-term, Armour said it could justify paying debt further. By paying down the further $5.3 million in payments, Armour had now paid back nearly $10 million in debt over the last six months. 

    This leaves the company with about $45 million in outstanding secured amortising notes. 

    It also closed its entitlement offer, which it launched last month, raising a total of $2.19 million from existing shareholders. 

    The remaining funds from the capital raise, and the transactions, will be used to fund work programs over the remainder of the year. 

    Source: Energy News Bulletin



  • 11 Aug 2020 3:13 PM | Sonia Harvey (Administrator)

    EMPIRE Energy has contracted Schlumberger to drill its awaited Carpentaria-1 well in the EP187 Beetaloo Sub-basin with civil works to begin this month.

    Schlumberger's Land Rig 183 will drill, case and suspend the 2900 metre deep well which will  test the Velkerri and Kyalla shales. 

    Empire said the well's design allows for future reentry, fraccing, and flow testing which it expects after the coming wet season. 

    This will be the precursor to a planned multi-staged fracture stimulated and tested horizontal section which may be drilled from the same well bore. 

    The rig was "determined to be the most commercially efficient to operate and mobilise with a strong track record of recent performance dril similar wells onshore Australia and an experienced crew," it said. 

    Managing director Alex Underwood called the contract a "key milestone". 

    "Empire will be the only the second company to drill a well in the Northern Territory's onshore Beetaloo Sub-basin the lifting of the moratorium in 2018, after Origin Energy which drilled Kyalla-117. 

    "We intend to be a long term contributor to the Northern Territory economy and to that end I am pleased that we have contracted with local businesses for key elements of the program including the upcoming civil construction works."

    Initial work should begin August 17 with water bore drilling, well pad site preparation and upgrading of the access to the well pad. All civil works will be performed by Top End businesses. 

    Source: Energy News Bulletin

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