Industry News

MORE than A$3 billion of renewable projects are vying for funding from the Australian Renewable Energy Agency’s A$70 million green hydrogen fund.

The fund was announced in April to help fast track the development of renewable hydrogen, and closed several weeks ago with ARENA receiving 36 expressions of interest in the round. 

The funding round is expected to play a significant role in supporting commercial-scale deployments of renewable hydrogen in Australia help meet energy minister Angus Taylor's goal of hydrogen production for under A$2 a kilo or ‘H2 under $2'.

"The strong interest in the Morrison government's Renewable Hydrogen Deployment Funding Round shows Australian industry is ready to co-invest with government and build a sustainable hydrogen sector," Taylor said today. 

Labor's climate spokesman Mark Butler said the massive oversubscription was evidence the government underestimates the potential of Australia's green hydrogen sector. 

"The scheme was oversubscribed and underfunded," he said. 

"The Morrison government never had any intention to properly invest in hydrogen development."

ARENA aims to use the funding round to support two or more large scale renewable hydrogen projects with electrolysers of a minimum 5 megawatt capacity with a preference for 10MW or larger. 

The expressions of interest include over $1 billion in total grant requests, over $3 billion in total combined project value and almost 500MW of electrolysis capacity. 

ARENA said projects selected in the funding round can also be considered for further financing from the government-backed Clean Energy Finance Corporation under its own $300 million Advancing Hydrogen Fund.

ARENA said it will now assess the expression of interest and invited shortlisted projects to submit a full application with the goal to award funding by the end of the calendar year. 

Source: Energy News Bulletin

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Upstream Production Solutions (Upstream PS) is delighted to announce it has expanded its business in the Northern Territory (NT) by setting up a ‘Darwin Hub’ facility to showcase its Operations, Maintenance, Projects, and Advisory capability.

The new ‘Darwin Hub’ facility includes offices, a logistics supply base and a safety critical device maintenance and repair workshop and reestablishes Upstream PS in the Territory after the company was founded there 20 years ago.

“This strategic move for Upstream PS brings us closer to our clients in the region and we look forward to working closely with the NT government, other businesses and the community to help the Territory grow.” said Cameron Wills, Chief Executive Officer.

Upstream PS provides operations and maintenance services in Australia and the NT region for clients such as Eni, Shell, Santos, C02CRC, APA, Origin, Origin APLNG, Arrow Energy, MEPAU and the Australian Government.

About Upstream PS

Upstream PS is a wholly owned subsidiary of GR Engineering Services Limited (ASX:GNG) with an extensive track record in the provision of operations, maintenance, projects and advisory services. The Upstream PS team has served the oil and gas industry for more than 20 years, with a strong reputation for providing safe, innovative, and sustainable solutions to production challenges.

For further information, please contact:

Upstream Production Solutions 

josh.harrison@upstreamps.com

AUSTRALASIAN oil and gas producer Jadestone Energy has posted a profit, despite the oil price crash and economic woes felt by other regional explorers and producers.

Jadestone, which operates the Montara and Stag oilfields offshore Western Australia, reported a pre-tax profit of US$13.1 million for the first quarter ending March 31. 

This is an increase from $10.67 million in the corresponding period in 2019, or roughly a 20% increase. 

However, profits were down compared to the final quarter of 2019, when the company posted net profits of US$27 million. 

Jadestone told shareholders yesterday afternoon that while net revenue for the first quarter had fallen 20% on the previous quarter, to US$74.2 million, its hedging program had ensured output remained "well above the Brent benchmark".

Of its US$13.1 million in profits, $8.2 million was made from hedged oil. 

Oil prices, both Brent Crude and West Texas Intermediate, were sidelined over the quarter when Russia and Saudi Arabia flooded the market in a dangerous game of chicken when neither country agreed to output cuts to secure the global oil price. 

Production from the Montara project totaled an average of 8799 bopd, lower than the first quarter of 2020 due to cyclonic activity and a maintenance shut down. 

Jadestone reported one single lifting from Montara over the three months to March 31 of 512,575bbls. 

Meanwhile Stag field production was up from 1,941bopd in the March quarter of 2019 to 2866 bbls last quarter. 

Two liftings were reported from the Stag field, totalling 5118,193 bbls, compared to a single lifting of 170,000 in the first quarter of 2019.

Earlier in the year, Jadestone announced it would shelve its Nam Du and U Minh gas project in Vietnam citing a deteriorating international gas market and government approval delays. 

The company also advised it would push back an infill drilling campaign in Australia until 2021.

Jadestone recently completed a seismic survey across its Montara oil field. It then planned to drill several wells across the Montara and nearby Skua oil and gas fields to increase production. 

The first well, H6, was to be drilled in the AC/L7 production permit on the Montara Field and was expected to spud this quarter. 

A second development well, Skua-12, was to be drilled in the adjacent AC/L8 license on the Skua Field.

Jadestone also planned to conduct workovers of the H3 and Skua-10 wells across the two respective Australian permits.

Source: Energy News Bulletin

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MELBANA’S 100%-owned Beehive permit offshore Western Australia has seen its terms extended by a year by the offshore titles regulator. 

Under the terms of the National Offshore Petroleum Titles Administrator (NOPTA) Melbana was required to drill a well at its Beehive prospect this year, but after Santos chose not to take up its option for an 80% farm-in has had to delay those plans.  

NOPTA has allowed a 12-month suspension of the work program for year 3 in WA-488-P  which now ends December 21 next year. The permit term ends December 21, 2023.  

The permit holds the Beehive prospect which could hold up to 388 million barrels of oil equivalent on a best estimate basis  

Total completed a 3D seismic survey over the area but last year chose not to take up the option to farm in for a 40% share of the permit. Santos took over its option but had always said it would only take up the project if it could first find a farminee. When it hadn't by the deadline of early this year, the full interest moved back to Melbana.  

Santos has an 80% share of other permits nearby such as the Dorado oil project it shares with Carnarvon Petroleum (20%) and has said it will farm down the project when it is at a later stage of development.  

Melbana says permitting and preparation to drill an exploration well that will target the large carbonate structure is underway. The well was due to be drilled before the end of the year. 

Source: Energy News Bulletin

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SANTOS has completed the acquisition of ConocoPhillips’ entire Northern Australia portfolio, for a cheaper price than first announced thanks to lower oil prices, with the price revised down from US$1.4 billion to $1.25 billion.

However the deal also sees an increased contingent payment of $200 million on sanction of Barossa, up from an original $75 million.

In March Santos announced it was delaying final investment decision on the backfill project given uncertain market conditions. 

Santos would take the US company's Northern Australia portfolio, leaving ConocoPhillips with only its non-operated interest in the Australia Pacific LNG venture in Queensland, which when the October deal was struck it saw as too cash-generative to give up. . 

"At completion, the net settlement amount was US$655 million, lower than the previously forecast amount of US$800 million, comprising the revised firm purchase price of US$1.265 billion less cash in the acquired business from the effective date of 1 January 2019 to completion with customary adjustments," Santos said in a statement. 

"The net settlement amount is before any sell-downs of interests owned by Santos in the acquired assets."

As of today Santos holds a 68.4% interest in the declining Bayu-Undan gas field  and the Darwin LNG it feeds. 

The company also now effectively owns a 62.5% stake in the Barossa project, due to go to DLNG, and Caldita field, a 40% stake in the Poseidon field, and a 50% stake in the Athena field.

It signed a letter of intent to sell down a further 12.5% interest in the Barossa project to Japan's JERA, and has a firm agreement to sell down a 25% stake in Darwin LNG and Bayu-Undan to SK E&S. 

"We are delighted to assume operatorship and continue to progress the Barossa project so that a final investment decision can be made when market conditions permit," Santos chief Kevin Gallagher said. 

"We welcome the ConocoPhillips' Australia-West employees to Santos and look forward to getting on with the process of integrating our two businesses to create one high performing team." 

Source: Energy News Bulletin

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ICHTHYS operator Inpex has suspended a contract with drilling contractor Maersk for its next phase development program in WA-50-L offshore northern Australia.

In Maersk's latest trading statement released overnight, the contractor advised shareholders it had received a suspension notice from Inpex and agreed to a suspension rate for its Maersk Deliverer Mobile Jackup rig. 

"Maersk Drilling has agreed with Inpex Australia to suspend the contract for Maersk Deliverer with effect from 30 April 2020," the company said.

The vessel is currently at the Ichthys standby location, according to MarineTraffic.

According to Maersk, the rig will now be re-contracted to drill Inpex's significant development campaign in the final quarter of this year.

The campaign includes 15 new development wells, drilled in water depths of between 235 metres and 275m. 

According to plans submitted to and approved by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) the Ichthys Phase-2 development was expected to take five years to complete. 

Japan's Inpex was given the all-clear to begin its next stage subsea work program in late April. 

It contracted McDermott International and Baker Hughes to provide joint umbilicals, risers and flowlines, and subsea production systems for the campaign. 

Phase 2 development of the Ichthys field will increase condensate production for export to Japan and other international markets, while gas will be piped to the Ichthys LNG plant in Darwin for processing. 

Source: Energy News Bulletin

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Australia's chief scientist said gas would remain a crucial part of Australia's energy mix for the next 10-30 years, but noted it would be used "less and less" frequently as renewables and battery storage take the lion's share of the energy mix. 

"We can bring vastly more renewable electricity if we support it, and in the short term the best way to do that is with gas," he said. 

Former Lord Mayor of Sydney Lucy Turnbull questioned the legitimacy of the government's rhetoric around a gas-fired economy, noting the Paris Agreement's goal of net zero emissions by 2050 which the government has signed on to.

"We have to reconceive our world in the post-COVID world as a post-carbon world and we do that by actually looking forward and that's the opportunity we have now," she said. 

"We should aim to have the emission profile and aspirations of Denmark, with the energy costs of Saudi Arabia." 

Source: Energy News Bulletin

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THE government of Timor-Leste has finally enacted its long awaited onshore petroleum laws.

Currently Nepean subsidiary Timor Resources is progressing its drilling campaign in the south of the country searching for oil in a ten-well campaign after a busy 2D seismic acquisition campaign last year. 

The law has been pending promulgation since February last year in the small, politically tumultuous nation.

The law is not just crucial for operations already underway by Timor Resources but also for the current bidding round that ends in October. 

The offer, which has 11 offshore and seven onshore blocks up for grabs, is the first since 2005, and was launched at its inaugural oil and gas conference in capital Dili last October,  and is set to close this October. Since then the nation's top oil and gas officials have been on the conference circuit trying to drum up interest. 

For the first time several onshore blocks are being offered in the frontier areas in the north of the country, though data is sparse. 

According to Miranda Partners, a Portuguese law firm active in the country, "The new rules cover all petroleum operations carried out onshore Timor-Leste, under the Petroleum Activities Law, from exploration, appraisal, development and production to abandonment, including the transport, processing and storage of crude oil and natural gas in an upstream context."

The law, Decree-Law No. 18/2020, will also apply to onshore facilities that service offshore operations. 

There are specific rules on operations, safety and local content.

Other provisions also include land access, relationships with local communities, and the installation and later abandonment of pipelines  

The laws will come into force 90 days after being published in the nation's official gazette.

Timor Resources  is hunting for oil on the south coast, home to several historic wells and some oil seeps and plans an eventual 10-well campaign , with five wells this year in one permit it operates under a production sharing contract arrangement with the Dili government and five more in its other permit in early 2021. 

Source: Energy News Bulletin

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AUSTRALIAN onshore explorer Empire Energy has appointed an old hand in the oilfield sector to its board, as interest grows in the small cap which owns a massive 13 million acres in the Northern Territory across the Beetaloo and McArthur Basins.

Yesterday afternoon, Empire announced it had appointed Peter Cleary to its board citing his commercial relationships and industry experience as an asset for the company.

Cleary is a familiar face in the oil and gas sector, having worked in senior leadership roles at Santos, the North West Shelf joint venture, and at BP in Asia. 

During his tenure at BP he was president of the North West Shelf Australia LNG, the marketing company for the Woodside Petroleum-led North West Shelf Joint Venture. 

He developed senior venture relationships with LNG buyers and governments in international markets, particularly China. 

Cleary's work at Santos was also LNG-focussed, possibly suggesting some pretty large ambitions by the junior. 

The board of directors told shareholders yesterday, Cleary's industry experience, relationships and track record would be "of particular value" to the company as it looks to progress its Northern Territory acreage from exploration stages to appraisal and ultimately commercialisation. 

The appointment comes as multiple analysts find Empire Energy an attractive investment following the release of new prospective resource estimates. 

Source: Energy News Bulletin

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MULTIPLE analysts have rallied behind Empire Energy after independent estimates almost doubled the amount of gas across the company’s permits in the Northern Territory.

Last week, independent oil and gas research firm Netherland, Sewell & Associates estimated Empire's entire portfolio, spanning 14 million acres, holds a combined 13.46 trillion cubic feet of gas on a 2U best estimate basis. 

Independent investment research houses; RaaS Group; Blue Ocean Equities; and Taylor Collision, all noted the "growing prospectivity" of the Beetaloo Basin and Empire Energy's prime real estate in the region

The massive increase in estimated gas in place was described by Empire managing director Alex Underwood last week as an "exciting and substantial resource for a company of its size." 

The frontier NT shale play has attracted international attention, which the Territory government hopes will turn into investment in the vast gas and liquids-rich Beetaloo and McArthur Basins. 

The jump in resources has seen at least three different consulting firms to up their ratings of Empire Energy, citing the massive resources as "exciting" with multiple commercialisation options.

RaaS noted the new estimate of 13.5 Tcf of gas "crystalised Empire Energy's longer-term potential" if the company's drilling program was successful.

"Given the region's high prospectivity, success from future drill programs could see cashflows within 36 to 48 months, assuming links and upgrades to existing pipeline infrastructure are delivered in parallel," RaaS analysts said. 

Raas have increased its base case valuation of the company by 20%, to $159 million, or 61 cents per share.  

"Empire has a number of event drivers over the next six to 12 months which in our view hold potential to confirm and expand this sizable uplift in net asset value." 

Raas Group's view is echoed by fellow research houses Blue Ocean and Taylor Collision. 

While Blue Ocean Equities analyst Garry Marsden believes Empire is still a speculative buy, he noted Empire is the only Australian listed small cap with exposure to the massive gas province of the Beetaloo, and its assets could be commercialised in both Darwin for international export markets as LNG and the east coast markets for domestic use. 

Blue Ocean lifted its base value of Empire by 55% from 49 cents per share to 76 cents based on the upgraded potential of the Beetaloo acreage. This would give the company a market cap of $203 million. 

Taylor Collision also released its own view following Netherland, Sewell & Associates report. 

"Although it is early stage activity, the confidence level associated with the gas potential remains relatively high and Empire Energy is sitting on an extensive gas resource," analyst Andrew Williams noted. 

"Based on increased gas potential, confidence levels, and adjustments to risk weightings, we value the company in a range of $81 million to $389 million." 

This would equate to around 31 cents to $1.47 per share.

Source: Energy News Bulletin

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