BPH Energy (ASX: BPH) has reviewed years of work on the potential PEP 11 gas field lying in the offshore Sydney Basin and reveals it has identified structural leads that could contain 1 trillion cubic feet (TCF) of gas.
To put that in perspective, the Bass Strait fields since 1965 have produced 6 TCF, meaning the equivalent of 1 TCF of gas supply for a 10-year period.
What is more, a 2010 report compiled by the private project generator Pangean Resources concluded that undiscovered gross prospective recoverable gas resources within PEP 11 have been estimated at 5.7 TCF (at the “best estimate” level).
BPH Energy owns almost 23% of Advent Energy, an unlisted oil and gas company based in Perth, which in turn holds an 85% interest in PEP 11. Bounty Oil and Gas (ASX: BUY) holds the remaining stake in the 4,576sq km offshore permit.
The petroleum permit area is mostly shallow with an average depth of 200m. While the basin is considered gas-prone, numerous significant petroleum shows have been reported that support the assessment that the basin contains an active petroleum system.
Offshore oil and gas seeps have been recorded from Long Reef (near the Sydney northern beaches suburb of Dee Why) to Catherine Hill Bay on the New South Wales Central Coast. These seeps have given rise to periodic hydrocarbon slick occurrences along the coast.
Offshore Sydney Basin exploration
The review covered work done by Santos (ASX: STO) and Ampolex, which was delisted after being taken over in 1997 by Mobil Corporation.
Santos reviewed an initial seismic survey over what is now PEP ll in 1981. Following further geological and geophysical interpretation, the gas major released a study in 1990 that showed the offshore Sydney Basin was not only prospective for gas, but 10 structural leads were identified (within four structural provinces) with the potential to host 1 TCF of gas.
BPH said an active hydrocarbon system has been demonstrated that is analogous to major discoveries in Queensland’s Surat-Bowen Basin.
“PEP 11 represents a unique opportunity to explore a frontier Permo-Triassic basin complex containing mature source rocks and active petroleum systems, adjacent to Australia’s most strategic gas market,” the company said.
ESP Exploration reported in 1982 that, of the 68 wells drilled in the onshore Sydney Basin since 1910, almost all had gas flows, with 41% of them flowing gas on test.
Advent has now identified a new target at Baleen, about 30km south of Newcastle.
PEP 11 adjacent to largest domestic gas market in Australia
PEP 11 remains one of the most significant untested gas plays in Australia, and is adjacent to the Sydney-Newcastle area, the largest domestic gas market in Australia.
“The gas supply crisis on the east coast of Australia has created a significant market opportunity to raise the funding to drill with the objective of the developing the PEP 11 project,” BPH stated.
The long-term gas supply there remains uncertain according to a report in January from the Australian Competition and Consumer Commission (ACCC). The report also said the southern states risk facing a shortfall in the medium term.
The latest statement from the Australian Energy Market Operator said southern supply from existing and committed gas developments will reduce by more than 35% over the next five years.