EXPLORATION ACTIVITES OTWAY BASIN
PEPs 163, 167 and 175, Otway Basin (Lakes Oil: Operator, 100% interest)
PEP169, Otway Basin (Lakes Oil: Operator, 49% interest)
The Otway Gasfield is located within PEP169, onshore in the Otway Basin near Port Campbell.
Lakes was ready to drill the Otway-1 well in 2013, before the Victorian onshore exploration moratorium was introduced.
The Otway-1 well will target conventional gas production from both the Waarre Sandstone (from which gas has historically been produced) and the underlying, but to date under-explored, Eumeralla Formation.
The Waarre Sandstone is very productive, with gas flow rates up to 50 TJ/d achieved at other nearby locations.
The Eumeralla Formation typically contains gas and, at the Skull Creek-1 well location (nearby to Otway-1), flowed gas at a rate of 9 TJ/d.
Drilling of the Otway-1 well can be expedited. Since the well is just 400 metres north of the existing Iona Gasfield (Victoria’s largest onshore Gasfield to date, now used for storage of gas), production of gas from the well can be quickly and easily brought on line.
Planning for the Otway-1 well was largely completed prior to introduction of the Victorian onshore exploration ban. The Otway-1 well can be drilled at short notice.
PORTLAND ENERGY PROJECT
Lakes Oil’s western Victorian acreage, PEP’s 167 and 175, has potential to be a major source of energy for the State.
14 wells have been drilled in the region, some dating back to the 1960’s. Although all of these wells intersected the Eumeralla Formation, the massive potential of that Formation was not historically recognised since much of the Formation is ‘tight’ and, in any case, the historic search was focused on oil.
LKO has identified a ‘Focus Area’ in the southwestern corner of PEP175 where there is potential for production of gas by conventional means.
An indication of the massive potential of the Focus Area can be gleaned from work undertaken independently on behalf of Lakes Oil. Based upon available information (essentially historic well logs and seismic data) it has been estimated* at a 50% confidence level that 8.3 Tcf of gas may be recoverable the Eumeralla Formation within the Focus Area and 3.2 Tcf recoverable from deeper Formations. This is equivalent to the entire recoverable gas resource of the Bass Strait.
*Source of Estimate: Lakes Oil NL 2016 Annual General Meeting Presentation. The Company is not aware of any new information or data that materially affects the information included in the relevant market announcement and confirms that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbons
Through review of historic data, Lakes Oil has selected locations for two ‘proof-of-concept’ wells, namely, Greenslopes-2 and Portland Energy-1. The proof-of-concept wells will be of conventional design, drilled to a depth of around 1,500 metres.