Empire Oil first came to the attention of the market when they drilled Gingin-3 in 1998 and then re-drilled the historic Rough Range oil discovery - scene of Australia's first onshore oil discovery - and subsequently brought the small field into production.

It has been some time between drinks for the company and managing director Craig Marshall hopes that drilling the Eclipse-1 well will break the drought. The well is a gas prospect with estimated gas in place of 557 billion cubic feet (bcf) - a very large target for a small company.

The Perth Basin is a prolific province, aptly demonstrated in the last six months. It has a long established production history as WAPET (Western Australian Petroleum Pty Ltd - now Chevron) provided Perth's gas supplies for many years prior to the North West Shelf project coming on stream. The three recent discoveries of Hovea, Beharra Springs North and Cliff Head - the latter in the previously undrilled offshore portion of the Basin - has renewed enthusiasm for the region.

Marshall has acquired new, good quality seismic over the Eclipse prospect resulting in an accurate mapping of the reservoir's structural integrity. Together with the drilling data from nearby wells, he has also looked at the porosity and permeabilities of the target formations to establish what sort of flow rates might be achieved in the event of a discovery.

"In the permit to date we have recorded over 400 kilometres of 2D seismic and reprocessed of 350 km of existing seismic. It is a good quality seismic area - we don't have a problem like in the northern Perth Basin where there is the surface limestones which do give you velocity problems.

"We don't have that in the Central Perth Basin - we have a beautiful data set and we're convinced that we have the seismic coverage there which demonstrates good four way dip closure in both the Eclipse and Eclipse West prospects.

"We have evidence of amplitude anomalies and amplitude verses offset anomalies in the top sands which indicate the reservoir may be gas charged.

Marshall understands the Gingin gasfields.

"The Eclipse prospect is especially exciting in that the seismic data set that we've got is quite different to the Gingin gasfields - either Gingin 1 or Gingin 2 or Gingin 3, which we ourselves drilled in 1998, which we now know was on the wrong side of the fault.

"The Gingin gasfield area is heavily faulted and is dependent upon fault seal. Eclipse and its twin Eclipse West are four way dipping anticlines which are closed at the Cadda Formation level or right at the top of the Cattamarra Formation, which is the reservoir objective.

"The best four way structural analogy would be the Mt Horner oilfield which is a four way dip closure and is closed at the Cadda level.

"What we have at Eclipse is a number of prerequisites which we consider extremely important.

"One is that we have an unfaulted four way dip anticline and the other is that we have closure much higher in the section than at Gingin. There is better reservoir quality and the reservoir quality we see in Eclipse is better than Gingin because we have an offset well nearby called Bullsbrook-1, drilled in the 1970's by WAPET, and we can see the porosities and permeabilities are certainly far better than those of Gingin's 8% porosity. Based on the Bullsbrook-1 well we estimated porosities at between 13 and 16%.

WA gas market opportunities

"The market aspect of Eclipse is extremely important," said Marshall.

"A commercial gas discovery within an hour's drive of Perth's CBD will have a price advantage over WA's North West Shelf gas producers, due primarily to the low transport tariffs the company will enjoy.

"Gas prices are probably one of the most commercially sensitive issues for WA's producers, but the fact that the North West Shelf producers have to pay for 1500 kilometres of transport means we wpuld anticipate significant lower tariff prices.

"Some of these existing gas supply contracts from established producers from the Carnarvon Basin are due to expire and so consumers will be looking for new gas contracts

WA's gas markets comprise domestic and industrial sectors.

"The industrial market is power generation and mineral value added consumption. The power generation demand would come from the Kwinana power station which is being converted to a gas-fired facility, and/or the Pinjar power station which is only 15kms from Eclipse, and is the peak producing power station for Perth.

"We could also directly generate power and sell that into the grid - which is an option we are considering - in the deregulated energy market that now exists in the state.

"There is also a market in the south west with the mineral sands industries and also with the alumina industry, which is a very power dependent industry. The industry is currently a large user of gas and is currently looking to diversify its supply. The minerals sands industries are world class in size, with correspondingly large energy demands.

The nearest gas pipeline - the Parmelia line - is underutilised and lies less than three kilometres from the Eclipse site.

Part 2 continued tomorrow.