Compared to Q2 2005, the September quarter production (14.9 million barrels) was 5.5% lower due to reduced contributions from the North West Shelf Venture and decreased oil production due to natural decline at Legendre and the continued shut-in of two Wanaea wells.
Sales volume of 14.8 million barrels of oil equivalent was 5.8% lower than Q2 2005. This was partially offset by the benefits of new production from Gryphon and a full quarter of Mutineer-Exeter production.
Despite this setback, Woodside remains on an upward arc, with production and sales volumes higher that the equivalent quarter last year. Compared to the third quarter of 2004, production and sales were both up 3.2%.
Oil Search also posted strong results – very strong results. Revenue generated in the September quarter has nearly tripled from the same period last year to reach US$218.8 million (A$287.48 million), the company said in an activity statement to the ASX yesterday. Oil Search attributed the 140% increase to higher oil sales and better realised oil prices.
Another large ASX-listed energy player, Origin, is also doing well. The company lifted its annual profit forecast on the back of a strong first quarter. Origin now expects its full year earnings to be 10 to 15% higher than in 2004/05, after previously forecasting a 10% rise.
But it is not plain sailing for Perth junior Bounty Oil & Gas, which is undergoing a struggle for control of its board between former managing director Tom Fontaine and the other current directors.
Another Perth company, exploration minnow Range Resources, has also found itself embroiled in controvery. Range has had its astonishing deal for exclusive petroleum and mineral rights in the Puntland region of Somalia called into question by the Somali government. In a letter to the Australian Stock Exchange but not released to the market, Somali Prime Minister Ali Mohamed Gedi said the deal with the regional government in the eastern Somali state of Puntland was invalid because only the country's transitional federal government could negotiate the sale of mineral and petroleum rights.
Also in Africa, Australian-listed explorer Baraka Petroleum is moving to undertake an airborne survey over its five blocks in Mali's Taoudeni Basin. The first stage of a planned ongoing works program is the US$3.7 airborne survey.
Back in Australia, Bass Strait Oil Company reported that the offshore Gippsland Maclean-1 well has reached total depth of 766 metres without finding significant hydrocarbons. The well will now be permanently sealed. The disappointment at Maclean follows a duster at Gilbert-1, also in Vic/P47.
Another duster has been encountered in the onshore Perth Basin production licence L2 by operator Arc Energy. Recommendations were made to the joint venture to plug and sidetrack exploration well Bartsia-1 to test the adjacent Kunzia prospect.
A Texan gas well was also plugged and abandoned this week, after Strike Oil started its three-well shallow gas-drilling program in the onshore Gulf Coast with a duster. Sorrel-1 intersected a 1.3 metre gas zone on water at the main target horizon. This thin zone did not justify completing the well for production, according to Strike.
Disappointing news has also been reported in New Zealand, with troubles continuing at Austral Pacific Energy's onshore Taranaki Cardiff prospect – with low gas flows from the upper Eocene-aged zone and a blocked lower test interval. Austral said testing of the Cardiff-2A well, in licence PEP 38738, was continuing, with steady production of gas to flare and condensate to tank.
In contrast, good drilling news was reported on the other side of the Tasman in Queensland. Initial drill stem tests have shown encouraging results at the Rowallon-14 coalbed methane exploration well on the Roma Shelf in permit ATP 336P, after the core-hole flowed dry gas at about 66,000 cubic feet per day, junior partner Sunshine Gas said.
In the Cooper Basin, junior oil producer Impress Ventures Limited signed a conditional agreement to purchase the bulk of troubled company Entek Energy's petroleum assets. Entek will sell its 12.5% stakes in six Cooper Basin exploration and production licences – 86, 87, 89, 104, 111 and 115 – to Impress. Entek will receive $1.5 million in cash from Impress, as well as 35 million Impress ordinary shares and 5 million options exercisable into ordinary shares at 8 cents within two years.
Also in South Australia, the first onshore exploration well in six years to specifically target oil in the southeastern portion of the state, has been scheduled for mid-November by operator Beach Petroleum. Cowrie-1 will be drilled to a depth of 1,400 metres in pastoral country 25 kilometres southwest of Naracoorte and within PEL 27 in the Otway Basin. The joint venture partners are operator Beach (30%), Origin Energy 50% and Otway-focused junior, Essential Petroleum, 20%.
In further Essential Petroleum news, a high-risk, high-reward onshore prospect in Victoria's Otway Basin due for drilling early next year has the potential to increase the company’s share price by almost 800%, according to an independent assessment.
The report commissioned by ResourceInvest Pty Ltd claimed that if the Pritchard-1 wildcat in PEP 151 found oil, this could add 84 cents to each share upon discovery of oil. The prospect is wholly owned by Essential.
Back in Queensland, Molopo Australia has announced a three-fold upgrade to gas reserves at its the Mungi coalbed methane (CBM) field in the Bowen Basin. Molopo said an independent report, carried out by international petroleum consultants Netherland, Sewell & Associates Inc, upgraded the previous 3P reserve estimates of 50.7 petajoules to 143 billion cubic feet of gas or 151.2 petajoules equivalent. The report also recorded a 235% increase in proved and probable (2P) reserves in Mungi, from 17.3PJ to 58.0PJ. Proven reserves (1P) at Mungi have risen from 1.0PJ to 20.8PJ.
Also in the state, the Queensland Gas Company has followed the lead of Arrow Energy by signing a gas supply deal for the 450MW Braemer Power Station. QGC has contracted to provide four petajoules of coalbed methane per year for 10 years. First delivery from the Berwyndale South CBM field is due in September 2006. QGC also has the option to supply a further 3.7PJ per annum.
In other pipeline news, Australian Pipeline Trust will undertake a $15 million expansion of the Goldfields Gas Transmission Pipeline (GGT) to increase capacity of gas transporation to Rio Tinto subsidiary Hamersley Iron's Paraburdoo mine in Western Australia. The pipeline will be expanded by constructing an additional gas turbine compressor at GGT's Paraburdoo compressor station site.
To finance, the Australian Gas Light Company is performing slightly ahead of expectations in its first quarter of the new financial year, following an adjusted underlying net profit of $386.8 million in 2004/05, said chairman Mark Johnson at the company's recent AGM. Underlying profit increased by 6.9% compared with the previous year and earning per share also increased by 6.5%.
In related news, drilling equipment supplier SDS posted a record quarter for the new financial year. SDS attributes part of its 38.2% or $9.5 million revenue growth for this September quarter to the acquisition of drill bit competitor International Drill Quip in June, following a bitter legal dispute with the company earlier this year. T
otal revenue of nearly $34.4 million compares with a September 2004 revenue of almost $24.9 million. SDS said the purchase of Maley Steels in September last year had also contributed to this boost.
