Industry News

Falcon Oil & Gas to waive pre-emptive rights on Tamboran’s purchase of Origin’s Beetaloo Basin assets

• The 50/50 Joint Venture (JV) between Tamboran and Bryan Sheffield (Sheffield) has entered into a binding Letter of Intent (LOI) with Falcon Oil & Gas Australia Limited (Falcon) to amend the terms of the Joint Operating Agreement (JOA) and the existing Farm-in Agreement (FIA) with respect to Origin Energy’s Beetaloo Basin assets.

• Under the LOI, Falcon, owner of 22.5% non-operating interest in Origin’s Beetaloo assets, will not exercise its pre-emptive rights in relation to the JV’s purchase of Origin’s 77.5 per cent operated interest in exchange for a partial extension to the carry consideration under the FIA, to be borne equally by Tamboran and Bryan Sheffield.

• Subject to completion of the Origin transaction, Tamboran will be the largest acreage holder in the Beetaloo, with approximately 1.9 million net prospective resources and hold ~1.8 trillion cubic feet (TCF) of net 2C contingent gas resources.

• The completion of the acquisition of Origin’s Beetaloo assets remains subject to Northern Territory Government approval, which is expected by the end of October 2022.

Click here to read the full announcement. 

Strong gas shows in Tamboran’s Maverick 1V well and material reduction in drilling time

Highlights

• The Maverick 1V (M1V) vertical well, drilled within Tamboran’s 100 per cent owned and operated Beetaloo Basin permit, EP 136, has safely reached a total depth (TD) of 3,050 metres.
• Based on mud-logs, the M1V well has intersected Mid-Velkerri “A”, “B” and “C” shales exhibiting strong gas shows, consistent with other nearby wells and in line with expectations. Preparations are underway for a comprehensive wireline logging evaluation before suspending the well.
• TD was reached in 18.3 days, representing a 54 per cent reduction in drilling time compared to other near-field vertical sections drilled deeper than 2,500 metres in the Beetaloo Basin. This also compares to the more than 100 days to reach TD at the vertical well at Tanumbirini 1 in EP 161.
• Tamboran’s newly designed bit and bottomhole assembly delivered a 314 per cent faster rate of penetration through the Moroak sandstone, the toughest interval to drill efficiently in the deeper Beetaloo due to its abrasive and hard nature. 
• The drilling results highlight how Tamboran’s team has successfully incorporated US technical expertise and shale drilling experience to increase drilling speed and efficiency. This is expected to play a key role in reducing future drilling costs within the Beetaloo Basin.

For full ASX Announcement, click here

Engineering company Monadelphous Group Limited has secured a contract to provide operations, maintenance and industrial services to support Petrofac in the decommissioning of the Northern Endeavour Floating Production, Storage and Offtake (FPSO) facility.

The Northern Endeavour is a 274 m long FPSO, permanently moored between the Laminaria and Corallina oilfields, approximately 550 km northwest of Darwin in the Timor Sea. Production began in 1999 and peaked at 170,000 barrels of oil per day.

In 2019, the facility was shut down by NOPSEMA after an immediate threat to health and safety was found at the facility. After owners Northern Oil & Gas Australia went into liquidation, it fell to the Government to maintain and ultimately decommission it.

Petrofac was contracted earlier this year as outsourced operator responsible for decommissioning and disconnection of the FPSO. The scope includes the provision of its unique integrated services, working with both local and global suppliers.

The support to Petrofac represents Monadelphous’ first offshore decommissioning contract with work expected to be completed in the second half of 2023.

It represents a host of new contracts and contract extensions awarded to Monadelphous totaling approximately US$160mn.

View Monadelphous full ASX Announcement 

Source: Offshore Network

Petrofac, a leading provider of services to the global energy industry, has officially taken over operatorship of the Northern Endeavour FPSO (Floating Production, Storage and Offtake) facility on behalf of the Australian Government. This major milestone is a huge step in the landmark decommissioning contract which heralds the start of an era of decommissioning in the nation’s offshore oil and gas sector.

Petrofac’s Australian team based in Perth, Western Australia, was contracted approximately six months ago to complete Phase 1 of the decommissioning of the Northern Endeavour FPSO by the Australian Government’s Department of Industry, Science and Resources (DISR).

Since the award, work has been underway to prepare the FPSO for disconnection. The first task was to carry out extensive due diligence including physical inspections of the remote FPSO, which is being maintained in non-production mode. The Northern Endeavour is a 274-metre-long vessel, moored between the Laminaria and Corallina oil fields about 550 kilometers northwest of Darwin in the Timor Sea.

As the nominated operator on behalf of the Australian Government, Petrofac is responsible for the safety and day-to-day operation of the FPSO, as well as preparing it for disconnection.

Petrofac’s team in Perth has grown since the award, creating local jobs and opportunities for upskilling in the Australian workforce. The team is supported by the company’s global technical hubs with their extensive decommissioning experience. A large proportion of the existing offshore crew on board the Northern Endeavour have been retained to ensure critical asset knowledge is retained.

Josie Philips, Petrofac’s Regional Director, Australia, said:

"The whole team including our subcontractors, the supply chain and the original operator, as well as the regulators and the Commonwealth, have pulled together to make this a safe, efficient and successful transition to our operatorship. Now under regulation, as operators we can focus on the next steps to safe disconnection.”

Nick Shorten, Chief Operating Officer for Petrofac’s Asset Solutions business, said:

“This is a high profile, landmark project both for Petrofac, and for the Australian decommissioning industry so I’m delighted to see the progress the team are making in setting the benchmark for the future using our unique integrated services approach.”

Source: Petrofac

Chief Minister Natasha Fyles has today announced Dr Frank Daly as the new CEO of the Department of Chief Minister and Cabinet.

With more than 30 years of experience in both public and private sector roles, including more than 10 years in senior executive roles in the Australian public sector, Dr Daly is equipped to lead one of the Territory’s key departments.

Dr Daly was appointed as the CEO of NT Health in May 2021, and played a pivotal role in guiding the Northern Territory’s health system through the COVID-19 pandemic, while also protecting jobs and making sure Territorians could work safely.

Working alongside the Territory’s Investment, Infrastructure and Major Project Commissioners, Dr Daly will oversee the Northern Territory’s future economic growth as we continue to build our $40 billion economy, while also making sure our social issues continue to be addressed.

Interim CM&C CEO Kathleen Robinson will be taking the opportunity for extended leave to spend time with her family.

Dr Marco Briceno, the current NT Health Chief Medical Officer, will act as the Chief Executive Officer of NT Health while a recruitment process commences to backfill Dr Daly.

Quotes attributed to Chief Minister Natasha Fyles:

“Dr Daly’s career has focused on leading departments through difficult situations – his decades of experience will be an asset to the Territory, as we continue to grow our economy and make sure we continue to address the social needs of our vulnerable Territorians.

“Dr Daly comes into the role following an extensive recruitment process.

“I thank Kathleen Robinson for acting as the Chief Executive over the past few months, and leading the Department of Chief Minister and Cabinet, a true Territorian who gets the job done.”

Northern Territory Government

Natasha Fyles

Chief Minister of the Northern Territory

Source: NT Government Newsroom

In 2022 October Business Month (OBM) will deliver an exciting and inspiring program featuring high profile keynote speakers covering leadership, resilience and overcoming adversity. This year also sees the return of OBM Partner Events, independently hosted events delivered by Territory business and industry as part of the broader program.

Events will be held across the regions throughout the month of October with a focus on motivating business owners and employees to encourage networking, facilitate professional development and provide business improvement strategies to support business growth.

To find out more and book go to www.obm.nt.gov.au

Santos notes today’s decision by Justice Bromberg of the Federal Court to set aside the acceptance by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) of an environmental plan covering the drilling and completion activities in relation to the Barossa Gas Project.

The relevant drilling activities were to occur at a site in the Timor Sea, approximately 140 kilometres north of the Tiwi Islands.

As a result of the decision, the drilling activities will be suspended pending a favourable appeal outcome or the approval of a fresh Environment Plan. Santos will be seeking to expedite these processes.

The Court’s decision was based on a finding that NOPSEMA could not be lawfully satisfied that the Drilling Environment Plan met the criteria required by the Regulations[1] and in particular failed to assess whether the Drilling Environment Plan demonstrated that Santos consulted with each person that it was required by the Regulations to consult with.

This is a disappointing outcome. Consistent with previous practice, Santos engaged about the proposed drilling activities with the Tiwi Land Council, a representative body with statutory authority under the Aboriginal Land Rights (Northern Territory) Act 1976. Similarly, Santos had engaged about the proposed drilling activities with the Northern Land Council, the Native Title representative body for the Tiwi Islands. NOPSEMA had accepted our efforts to consult with Tiwi Islanders in accordance with the Regulations when it decided to accept the Environment Plan for those activities.

Given the significance of this decision to us, our international joint venture partners and customers, and the industry more broadly, we consider that it should be reviewed by the Full Federal Court on appeal.

Santos is committed to continuous improvement in our consultation processes. Our relationships with the Traditional Owners, local communities and landholders where we operate are very important to us.

Barossa is an important gas project for the nation, enhancing jobs, exports, and our relationships with investors and gas customers in Asia who have depended on Australia for their energy security for decades.

The Barossa Gas Project is approximately 46 per cent complete. The drilling activities are not on the critical path for the project and we have headroom in the project cost contingency.

Santos appreciates the strong support from our Japanese and Korean joint venture partners, who have, in good faith, and on the back of Australia’s historical reputation as a safe and stable investment destination, invested in this project.

Project approval uncertainty is a public policy issue that should be urgently addressed by Australian governments to reduce risk for trade and investment in projects around the country.

[1] Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009

This ASX announcement was approved and authorised for release by Kevin Gallagher, Managing Director and Chief Executive Officer.

To view the media release click here

Origin Energy Limited (Origin) will divest 100 per cent of its interest in the Beetaloo Basin, and has announced an intention to exit its upstream exploration permits, as the company focuses on its strategy and ambition to lead the energy transition.

Agreements have been executed with Tamboran (B1) Pty Limited (Tamboran (B1)), an entity 50/50 owned by Tamboran Resources Limited (Tamboran) and its substantial shareholder, Bryan Sheffield, to divest Origin’s interest in the Northern Territory’s Beetaloo Basin for an upfront consideration of $60 million and a royalty on future production over the life of field across the Origin interest being acquired. Origin has also executed a gas sale agreement for offtake of future gas production.

Origin will undertake a strategic review of all remaining exploration permits (excluding its interests in Australia Pacific LNG) with a view to exiting those permits over time. Origin will continue to comply with its obligations under existing joint venture agreements and work with its joint venture partners as it considers its exit.

Origin CEO Frank Calabria said, “The decision to divest our interest in the Beetaloo and exit other upstream exploration permits over time, will enable greater flexibility to allocate capital towards our strategic priorities to grow cleaner energy and customer solutions, and deliver reliable energy through the transition.

“We believe gas will continue to play an important role in the energy mix and it remains a core part of our business.

“Notwithstanding the prospectivity of any of these permits, typically the experience in progressing these types of projects is that the exploration and appraisal phase can be uncertain, and it can be capital intensive to bring projects into production. Ultimately, we believe Origin is better placed prioritising capital towards other opportunities that are aligned to our refreshed strategy.

“The suite of agreements executed with Tamboran (B1), allow Origin to realise value created by our investment and exploration activities to date, and ensures another operator present in the area and committed to developing its resources, can continue to take the venture forward.

“We have also signed a gas sales agreement that will deliver competitively priced gas supply to Origin if development ultimately occurs from the Beetaloo.

“We’ve been exploring in the Beetaloo Basin alongside our partner Falcon for eight years, and we’re grateful for the strong support we have received from the local community, including Native Title holders and contractors, as well as the Northern Territory and Federal governments.

“Gas will continue to have an important role in our business, particularly through our interest in Australia Pacific LNG and role as upstream operator in that venture, and in the broader energy mix as we look to underpin reliable energy supply to customers and accelerate our investment into the energy transition,” Mr Calabria said.

Under the terms of the agreement with Tamboran (B1), Origin will fully divest the entity which holds its 77.5 per cent interest in the Beetaloo Basin joint venture. Tamboran will assume operatorship of the Beetaloo Basin joint venture, which is 22.5 per cent owned by Falcon Oil & Gas Australia. The agreement has an economic effective date of 1 July 2022, and as a result, Tamboran (B1) will reimburse Origin for any costs incurred for the current Beetaloo workplan from the effective date until completion.

Origin will also receive a 5.5 per cent royalty based on wellhead revenues produced from the three Beetaloo permits which are held by the entity being acquired by Tamboran (B1).

In addition, Origin has executed a gas sales agreement for up to 36.5 PJ per annum over 10 years, conditional on Tamboran taking a final investment decision on developing the project and associated infrastructure and obtaining regulatory approvals.

Completion of the transaction is subject to certain conditions, including Northern Territory Ministerial consent relating to the transfer of the shares in the entity which holds its 77.5 per cent interest in the Beetaloo Basin joint venture. Origin will work closely with Tamboran to facilitate a smooth transition to the new ownership, particularly for key stakeholders in the Northern Territory. Falcon has a pre-emptive right to acquire Origin’s 77.5 per cent interest in the Beetaloo Basin joint venture.

Origin expects to record a non-cash post-tax loss of $70 - $90 million in relation to the transaction. This estimate is subject to finalisation of Origin’s half year 2023 financial statements.

Divestment of the Beetaloo interests and the review of remaining exploration permits will have no impact on other aspects of Origin’s Integrated Gas business, primarily the company’s investment in Australia Pacific LNG and role as upstream operator, or Future Fuels which includes potential hydrogen projects and carbon offset projects.

For full ASX/Media Release, click here

The operator of the Mereenie project Central Petroleum announced the one-year gas supply agreement. 

Under the contract Shell will take a total of 3.65 PJ from January 1, 2025. 

Shell has been supplying around 10% of the east coast domestic market from its Queensland operations since 2017.

"This new gas supply agreement allows Central to broaden its customer base across the Northern Territory and eastern Australia," Central chief executive Leon Devaney said. 

"We are very excited to have Shell Energy as a customer and hope this will be the start of a long relationship."

The Mereenie project is a joint venture with Central holding a 25% interest, Macquarie Group a 50% stake, New Zealand Oil & Gas a 17.5% interest and junior Cue Energy the remaining 7.5%. 

The fields were only connected to the east coast in 2017, when the Northern Gas Pipeline became operational. 

Gas is piped 622 kilometres from Tennant Creek in the NT to Mount Isa in Queensland and is then distributed across Victoria and New South Wales.

Central and Shell will need to execute a transportation agreement with the owner of the pipeline, Jemena. 

Central said the agreement was for firm gas supply, with take-or-pay provisions and fixed price. It did not reveal the value of the contract but noted that it covered existing uncontracted production. 

"This agreement demonstrates how the industry is working together on bringing more supply to customers in the domestic east coast market and we are proud to be connecting gas from the NT to our east coast retail customers for the first time," Shell Australia trading vice president David Guiver said. 

Production from Mereenie peaked in 2019 at 16 PJ. June figures show the field produced at around 30.5 terajoules per day. 

Central is currently drilling wells on the flank of the Mereenie field to intersect reservoirs within the Pacoota sand. 

It drilled two production wells in mid-2021. Another two production wells will be drilled next year along with a six-well recompletion campaign to boost production. 

Separately, the venture is looking to develop the Stairway Formation which has a contingent resource of 100 PJ. 

Source: Energy News Bulletin

Read ASX media release here

Beetaloo Operations Update: IP30 Rates

Empire Energy Group Limited (“Empire”) is pleased to provide shareholders with an update regarding the operations in Empire’s 100% owned and operated EP187 tenement, located onshore Northern Territory in the Beetaloo Sub-basin (“Beetaloo”).

Please click here to read the full announcement.