BPH Energy’s investee closer to drilling Seablue-1 after executing another letter of intent

BPH Energy ASX Advent drilling Seablue-1 letter of intent New South Wales PEP-11
Advent Energy plans to contract Oil States Industries to provide conductor and surface casing and associated services for Seablue-1.

BPH Energy’s (ASX: BPH) investee is closer to drilling its much-anticipated Seablue-1 exploration well within PEP-11 in offshore New South Wales after it issued a letter of intent to award another contract.

Under the LoI, Investee Advent Energy will award Oil States Industries (Asia) the contract to provide conductor and surface casing plus associated services for the planned Seablue-1 exploration well.

BHP owns 33% of Advent, which in turn holds 85% of PEP-11, with Bounty Oil and Gas (ASX: BUY) retaining the remaining 15% in the permit.

This latest LoI follows one earlier this month that Advent issued to Aztech Well Construction Services for the provision of drilling project management services.

Seablue-1 exploration well

With two LoI for contracts in place, the well will be drilled as soon as requisite approvals have been secured.

Seablue-1 will be drilled in 125m of water about 26km offshore and 30km from Newcastle.

The well has a planned depth of 3,150m and it is expected it will take 40 days to complete.

As well as the objective of discovering gas, Seablue-1 will also be used to evaluate carbon capture and storage potential.

With carbon prices expected to rocket amid a world pushing towards zero emissions, Advent is evaluating carbon capture and storage technology for PEP-11.

The International Energy Agency has identified carbon capture, usage and storage is the only large-scale mitigation option available to deliver the necessary emission reductions required to meet 2050 climate goals.

BPH pointed out PEP-11 was the closest potential carbon storage area to major sources.

PEP-11 covers more than 4,500 square kilometres.

East coast gas market

In making a gas discovery at PEP-11, Advent’s strategy is to meet expected demand in the east coast gas market.

A recent ACCC report noted a supply shortfall in the east coast market was increasingly likely.

ACCC chairman Rod Sims said the supply situation outlook for the next year was precarious especially if LNG producers continue to export all of their surplus gas.

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