The WA-314-P and WA-315-P permits each cover about 2000 square kilometres and are located roughly 300km from the Buccaneer Archipelago near Derby, Western Australia.
“We believe these leases are quite prospective and we have the experience to take advantage of the opportunities,” said Karoon CEO Bob Hosking.
“Our exploration manager [Mark Smith] has been involved in G&G in 314 and 315 over the last couple of years and has extensive experience with BHP in the Browse. We also have strong links with contractors who have been working the Browse for a number of years. We are purchasing 2D seismic and should have some results on that over the next four weeks.”
The leases are on trend with the giant gas condensate fields Brecknock and Scott Reef. At Scott Reef reserves are estimated at 13 TCF with 130 million barrels of condensate. North Scott Reef is only 5km south of WA-315-P.
Leviathan/Buffon Prospect in WA-314-P and WA-315-P mapped from 2D seismic has up to 300m vertical closure and could hold 7 TCF of gas with 70 million barrels of condensate, assuming the same gas to condensate ratio as Scott Reef, according to Hosking.
There is also the potential for large oil volumes and based on seismic and rock types, oil reserves potential in these two leases could exceed a billion barrels, he said.
The shallow water setting at the Seringapatam Reef in WA-315-P will cut development costs and this area could become a hub for tis part of Browse and deepwater discoveries to the west, Hosking said.
Karoon will earn the right to earn a 100% interest in the permits by conducting 3D seismic over 400 square kilometres in each permit. Following exploration success and development, Liberty will receive an overriding royalty of 1.5% on production of oil and gas for five years, increasing to 2% after that period.
Karoon is planning to make only a ‘very modest capital contribution’ to finance the 3D acquisition and drilling of two wells. It is now considering various farmout options.
This is Karoon’s first offshore permit. In fact it is the only the company’s third permit of any kind. It is currently exploring for coal-bed methane and natural gas in PEP163 and EL 4537 which are about 100km south-east of the Melbourne CBD.
