IMPERIAL OIL AND GAS PTY LTD

Since early 2010 the Company's 100% owned subsidiary Imperial Oil and Gas Pty Ltd commenced the screening of onshore basins in Australia principally for large scale shale gas exploration. It has identified a target basin in the Northern Territory and secured exploration permits for 14.6 million acres.

All the permits constitute high risk/high return frontier plays at very low historic exploration maturity. There has been no petroleum exploration in the Northern Territory acreage.

The exploration target is for shale oil and gas targets in organic-rich black shales. The shales are proven to be gas-prone, with a mineral core hole igniting and sustaining a 6m gas flare for around 6 months, burning an estimated 1Bcf.

Land holder negotiations are underway at present. At the appropriate time the Company will seek to undertake a review of these opportunities with parties it has developed relationships within its operations in the USA. 
 

 

Strategy

  • The Company holds a 100% interest in 59,000 km2 (14 million acres) of prospective shale gas exploration acreage in the Proterozoic McArthur Basin (Exploration Permit Applications EP (A) 180 – 188).
  • The McArthur Basin is a petroleum frontier basin at low exploration maturity and no prior shale gas activity.
  • It is an inverted Proterozoic basin with thick carbon-rich black shale petroleum source rocks also mined for Pb-Zn.
  • There are direct indications of oil & gas in the basin and existing gas pipelines. Analogue shale gas basins suggest Imperials acreage contains of the order of 24 Tcf of potential recoverable resources.
  • For the permits to be granted and exploration work to start agreements must be negotiated with Traditional Land Owners. This process has commenced.

 

Exploration Play

  • The target gas resource is in 1,640 million year old Palaeo-Proterozoic organic-rich black shales of the Barney Creek Formation and equivalents, proven gas-prone in the South McArthur Basin. In particular the 1979 mineral core hole GRNT-79-9 ignited and sustained a 6m high yellow smoky gas flare for approximately 6 months producing an estimated 0.5 Bcf at 6mmscfd. Gas analysis revealed C1-C7. In addition oil bleeds are common in cores and hence shale oil offers secondary potential.

  • The Meso-Proterozoic Velkerri Formation also contains carbon-rich black shales & siltstones and is present in the southern EP(A)s 187 & 188. This formation is the focus of shale gas exploration by others in the adjacent Beetaloo Basin to the south.

Key Uncertainties & Risk

  • Consistent with a frontier basin the regional extent, quality, and thermal maturity of the Barney Creek & Velkerri Formation shales have yet to be adequately constrained due chiefly to past focus on mineral exploitation from the former.
  • Potential gas-prone sweet spots are yet to be delineated and hence strategy of acquiring a very large initial acreage position.

Exploration Work Programmes

  • Once each permit is granted, the work programmes in all 7 permit areas are essentially the same.
  • Years 1 & 2 of the 5 Year initial Exploration Term will be concerned with demonstrating the quality of any potential gas shales by geological fieldwork, sampling, and by acquiring drill core samples.
  • Year 3 will focus on 2D seismic acquisition to define the basin shape and depth as well as subsurface targets for vertical test drilling in Year 4.
  • If proven to contain shale-gas then Year 5 will include the drilling and evaluation of a deviated or horizontal well involving fracking and gas production testing.

To view additional information please view:

Imperial Oil & Gas Snapshot