Key Petroleum shores up gas targets near Strike and Warrego Energy’s ‘staggering’ discovery

Key Petroleum ASX KEY Strike Energy STX Warrego WGO Kingia Sandstone Perth Basin
Key Petroleum is reviewing its acreage in the Perth Basin following a nearby “staggering” discovery.

Key Petroleum (ASX: KEY) has revealed Strike Energy (ASX: STX) and Warrego Energy’s (ASX: WGO) West Erregulla-2 discovery is close to its own permits in the Perth Basin.

According to Key, the companies’ reported a “staggering” discovery within the Kingia Sandstone of the West Erregulla-2 well.

The discovery is also in addition to gas pay in shallower intervals of the Permian sequence.

Strike and Warrego unveiled the discovery earlier this week, which involved a gross gas column of at least 97m, including a 67m section with several high-quality large units of clean sand with thick blocky porosity development and high gas saturation.

The section is believed to have 41m of net pay and average porosity of 14.3%, with up to 19% peaks.

“A review of offshore and onshore wells in the northern Perth Basin suggest the reservoir prospective fairway is regionally extensive,” Key noted.

Key will now begin identifying several leads within its own portfolio which will comprise reviewing work carried out by previous operators of the offshore WA-481-P permit.

The company said the Kingia and High Cliff sequences are the primary reservoirs within the Waitsia gas field and are anticipated to be the same primary intervals within Key’s Parse prospect and the southern areas of its EP 437 and L7 permits.

Key said it has mapped Waitsia-style leads within its acreage and has also planned a 3D seismic survey over the Mount Horner.

“Mount Horner is expected to offer a considerable uplift in resource potential for the area, with a much higher oil and condensate yield due to the natural fractionation of hydrocarbons on the shallower northern flank of the Bookara Shelf,” Key explained.

Cooper Basin acreage

Earlier this week, Key revealed a reassessment of data had identified additional prospects within its Meeba project, with the new prospects along trend from Bridgeport Energy’s operated Inland Oilfield in the Cooper Basin.

The company noted that rig availability exists to drill Ace-1 and potentially other prospects in the Tanbar gas project in October and November.

In mid-July, Pancontinental Oil and Gas agreed to farm-in to Key’s Meeba project.

Pancontinental is acquiring an undivided 20% participating interest in ATP 920 with the option to secure a further 15% participating stake in the licence. The company is also locking-in a 25% interest in the Ace Area of the project.

Finalisation of the agreements are ongoing, with Key also noting it was advancing other drilling participation opportunities with third parties and would keep the market informed.

By late morning trade, Key’s share price was up almost 43% to $0.01.

Lorna has more than 10 years' experience as a finance journalist and editor. She has written for numerous industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has also covered a myriad of small and large cap ASX and dual-listed stocks.