When granting Eagle Bay Resources the new Cooper Basin exploration permit, PEL 182, last week South Australian mineral resources development minister Paul Holloway said the Cooper Basin continued to provide successful results for exploration.
“Eagle Bay Resources’ winning bid and the level of interest shown in the bidding process, reflects how highly the Cooper Basin is rated as an exploration investment destination,” Holloway said.
“This confirms how highly the Cooper Basin is rated as an international exploration investment destination. Results over the past few years show that of the 45 exploration wells drilled in the area, new oil and gas pools have been discovered in 26 – which is an outstanding result, reflecting the basin’s ongoing exploration and development success.”
Between January 2002 and the end of June 2005, new hydrocarbon pools had been found in 57% of cooper basin wildcats and a 44% rate of commercial exploration success had been achieved, with 20 new commercial fields being established
In the same period, the Santos/Origin/Delhi Petroleum joint venture drilled 153 new wells, 88% of which had intersected commercial quantities of petroleum.
“Clearly, Cooper Basin exploration has proved to be rewarding and this success is expected to continue,” Holloway said.
But while exploration in the region has a high success rate, the finds are mostly modest.
Production from Santos’ Cooper leases is in decline, forcing the company to look to other states and overseas for future growth, and while the Cooper continues to provide good cashflows for many outfits, the days of company-making discoveries are probably over.
Stuart Petroleum is relying on incrementally increasing its portfolio of Cooper Basin acreage and gradually building up production. The company has had a record financial year with a full-year profit of $10.1 million. It produced 832,000 million barrels last year and has more projects planned for the Cooper, including development and wildcat drilling.
But two other successful juniors that have also had record years – Beach Petroleum and Cooper Energy – are while looking elsewhere for future growth after having built their foundations in the Cooper Basin.
Beach produced 1.05 million barrels last year, but only a third of this was from the South Australian part of the Cooper Basin. Beach moved into the Eromanga Basin, Queensland some time ago. It has built up a strong acreage position there and extensive development drilling has seen Queensland become the source of two-thirds of the company’s production.
Now beach has built up a 37.5% stake in the Basker Manta project. With the first well in that project having spudded this week, Beach will soon become a Bass Strait oil producer.
Cooper Energy produced 368,086 barrels last year and its cash reserves rose 78% to $22.1 million. But it is looking overseas for further growth, taking up 100% of an offshore block in Tunisia and taking a 10% stake in a Cambodian offshore block.
The company has said the Cooper Basin was unlikely to produce a company-making discovery, so it was now looking overseas at undervalued markets that offered low-cost, low-risk entry programs.
What will be the next junior to make it big in the Cooper? It’s hard to say.
Innamincka Petroleum has two South Australian Cooper basin permits – PELs 101 and 103 – and has found oil at Juniper and gas at Flax. It also has an inventory of exploration targets and recently attracted Canada’s Avery Resources as a farmin partner.
Another junior worth watching, Great Artesian Oil & Gas, has three ex-Santos Cooper permits – PELs 91, 106 and 107 – which are all wholly owned, and it has been able to attract farmin partners on a prospect-by-prospect basis within those blocks.
Last year, Great Artesian made three gas discoveries in PEL 106. One of these, Smegsy-1, has now come into production. But this year, the company is concentrating on oil exploration and plans to drill 10 or 11 wells by the second quarter of next year.
But Great Artesian has not put all of its eggs into the Cooper basket. It also has a high-risk, high-return block in the offshore Otway Basin, South Australia.
Managing director Ray Shaw has touted this block as a "potential company maker” - words he does not use to describe the firm's cooper prospects.
Great Artesian has attracted Oilex as a farmin partner for this prospect. But given the world-wide shortage of drilling vessels, the partners do not anticipate drilling to begin until next year.