“We took the postion some years ago that the Gippsland basin and Bass Strait were underappreciated,” Adams told EnergyReview.Net.
“The big easy stuff has been done, but the smaller more subtle, more technical fields are still there. The big companies require large thresholds of materiality, but at some point small companies get the opportunity to get the acreage and make a profitable concern of it.”
Adams said three factors were making the development of previously uneconomic fields worthwhile.
“3D seismic lets us see things that weren’t possible in the past; the region’s pipeline network is now extensive, which brings a huge amount of flexibility and expansion into the system; and the higher oil prices have rejuvenated the whole sector,” he said.
The Moby field lies in the P/47 permit, which is being explored in partnership with two other minnow companies, Moby Oil and Eagle Bay Resources.
BSOC said gas samples taken from its Moby-1 well have confirmed the Moby structure as a new field gas discovery that is likely to give the exploration partners exposure to about 64 billion cubic feet of gas.
BSOC has been operating in Bass Strait since 1998 and has a board stacked with experience including former Shell and BHP employees.
Moby-1 is located offshore approximately 25km south of Orbost, Victoria and five kilometres east of the producing Patricia Baleen gas field. BSOC is optimistic that once Moby is ready for production the partners will be able to tap into nearby infrastructure.
Following news of the Moby discovery, shares in BSOC, which operates and has a 40 per cent stake in the project, lifted four cents or 14.3 per cent to 32 cents. They have since risen to 38.5 cents. The company was listed at 20 cents a share just a few months ago.
Perth-based Eagle Bay Resources, with a 25 per cent interest, saw its shares rise 2.5 cents or nearly 30 per cent to 11 cents and Victorian company Moby Oil and Gas Ltd had a lift of 4.5 cents or 22 per cent to 25 cents. Eagle Bay has since slipped back to 9.5 cents, while Moby Oil is now at 29 cents.
BSOC plans to drill a second well by the end of 2004 with ZaneGrey-1 in permit Vic/P42 to follow Moby-1.
The Vic/P42 permit is being explored in partnership with Japanese major Inpex. Each partner has a 50% stake and BSOC is the operator. The company estimates the Zane Grey prospect to contain unrisked prospective reserves of 134 million barrels of recoverable oil.
The company’s third permit, Vic P/41, lies on the other side of the Gippsland Basin. Adams said he was currently examining 3D seismic from this area and there was a reasonable chance that the Kipper field would extend into this permit.