Operators are gearing up to drill some key exploration wells in Australia this year and beyond although overall activity looks set to continue on the lower trajectory of 2022.

Wells to watch include Chevron’s Wheatstone Deep-1 and the Woodside Energy-operated Gemtree-1 that are exploration tie-backs to the Wheatstone liquefied natural gas project in Western Australia.

Meanwhile, the drill bit is likely to see action in the onshore exploration hotspot of the North Perth basin, thanks to the likes of Beach Energy, Strike Energy and Energy Resources.

North Perth basin wildcats on Beach’s hitlist include Trigg-1, Tarantula Deep-1, Redback Deep-1 and Peacock-1, while the operator also plans to drill the Beharra Springs Deep-2 appraisal well, according to consultant RISC.

Strike plans to drill the Southwest Erregulla-1 and West Erregulla-1 deep exploration wells and also the South Erregulla-2 and -3 exploration/appraisal wells.

Energy Resources intends to drill the Lockyer-2 and North Erregulla Deep-1 exploration/appraisal wells on its Lockyer Deep discovery.

Another interesting onshore drilling campaign will see Central Petroleum and partner Santos’ re-enter the suspended Dukas-1 well and they also plan to drill the Mahler-1 well — both in the Amadeus basin in the Northern Territory — to test sub-salt prospects with gas, helium and hydrogen potential.

Dukas-1, which was drilled in 2019 on Permit EP 112, targeted the Heavitree-Gillen conventional play in the southern Amadeus basin. The wildcat, which was being sidetracked after the drill string became stuck on the vertical well, was subsequently plugged and abandoned for possible future re-entry. No testing was performed on the sidetrack as drilling was halted before the primary target was intersected although Dukas-1 has been described as a gas discovery.

Future offshore wildcats

Looking further ahead, two planned offshore wells of note are EOG Resources’ delayed Beehive-1 well and Gulf Energy’s Lion-1 probe.

The Beehive-1 wildcat on Block WA-488-P in the Bonaparte Gulf that will target 416 million barrels of oil equivalent prospective resources will now only be spudded as early as January 2024 — and perhaps not until late the following year.

EOG last June completed the geophysical survey for the shallow-water Beehive-1 wildcat that will be drilled vertically to a depth of around 5090 metres.

Gulf has a commitment exploration well to drill on Block Q/23P in the Gulf of Carpentaria however this probe, Lion-1, is also expected to be delayed as Gulf is looking to farm out ahead of drilling.

Lion-1 is located in the Bamaga basin offshore Queensland, which the operator has hailed as Australia’s newest petroleum basin.

Gulf earlier said that the Bamaga basin was unknown until the company discovered it with its regional seismic survey in 2012.

Back in 1984 Duyken-1, the only well drilled in the Gulf of Carpentaria, tested the younger sediments of the overlying Carpentaria and Karumba basins but not the deeper Bamaga basin 120 kilometres to the southwest, which at the time was unrecognised.

Gulf now plans to drill the first exploration well in the Bamaga basin targeting the Lion Prospect, a four-way dip closure with touted potential to contain 3.8 trillion cubic feet of recoverable gas resources, but first wants a farm-in partner to spread the risk and cost.

Activity on the decline

Exploration drilling is waning in Australia with 26 wells drilled in 2022, three fewer than in the prior 12 months, with a total of nine wells delivering the goods for a success ratio of 34.6%.

Exploration expenditure also declined Down Under with last year’s total spend of A$984 million (US$652 million) being down 12% on the previous year, noted RISC.

Onshore exploration spending decreased 17% to A$597 million while A$387 million was invested offshore, itself down 3% from one year prior.

Since late 2019, operators have been spending more on exploration onshore Australia than wildcatting in its offshore waters.

Players have also been more successful onshore with eight of the 21 wells drilled onshore last year being conventional hydrocarbon discoveries. Ten onshore probes missed the mark, while there were two coal seam gas (coalbed methane) wells sunk and one exploration well drilled to target shale gas. There were five wildcats drilled last year offshore Australia but just one — Santos’ Pavo-1 well — came up trumps.

Disappointments in 2022 included Western Gas’ Sasanof-1 well that had pre-drill estimated prospective resources of 7.2 Tcf of gas. The failure of this well was attributed to lateral seal fail and/or limited gas charge, RISC’s head of geoscience, Adam Craig, told the APPEA conference in Adelaide.

Another notable exploration failure last year was Finder Energy’s Kanga-1 well on Block WA-412-P, to which SapuraOMV is farming in, that was targeting an estimated pre-drill prospective resource of 170 million barrels of oil.

The Kanga-1 probe was drilled to test the hydrocarbon potential of the Middle to Upper Jurassic sandstones below the Valanginian unconformity at the northern extension of the Rankin trend.

“[The] well failure has been attributed to no trap being present due to an increase in thickness of the Forestier Claystone shales than was interpreted pre-drill,” Craig quoted SapuraOMV as saying.

One notable upward upstream trend in Australia is the number of production licences and retention licences, with the area under production licences increasing 18% over the past seven years while the acreage under retention leases has grown by 63% over the same period.

However, since end-2015 the area under exploration licences has fallen by 46% with the most dramatic decline being the 64% reduction in offshore areas under exploration licences.

Last year saw the award of four exploration permits for blocks in federal offshore waters — three from the 2020 round and one from the 2019 acreage release. However, to date there have been no awards for acreage offered in the 2021 licensing round that closed on 3 March 2022.

There were also nine onshore exploration permits awarded last year — five in Queensland (four of which were for coal seam gas), three in South Australia and one in Western Australia.

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