EXPLORATION

Cooper Basin cash to energise Blue Energy CSM projects

RE-BRANDED explorer Blue Energy intends to generate cash flow from its conventional petroleum assets in the Cooper Basin to support its longer term coal seam methane ambitions, according to managing director Sharif Oussa.

Cooper Basin cash to energise Blue Energy CSM projects

The company, which recently changed its name from Energy Investments, wholly owns about 32,000 acres (12,950 hectares) of CSM-prospective acreage in Queensland.

It also holds non-operational stakes in several conventional oil and gas permits in the Cooper-Eromanga Basin in South Australia and Queensland, where this week it signed a farm-out agreement with Danish company Odin Energy.

Speaking at the Excellence in Upstream Energy conference in Sydney yesterday, Oussa said the company had an unusual portfolio of assets compared to other CSM-focused companies in Australia.

“What we’ve found over the last eight or nine years is that it takes a long time for CBM projects to get going and start generating cash flow,” he said.

“So we looked at successful CBM companies operating in the US and saw that most of them started off with conventional assts. And so that’s exactly what we’ve done.”

As a result, Blue Energy considered the Cooper Basin a safe bet to start generating immediate cash flow.

“We’ve chosen to operate in the Cooper, primarily because it’s low risk. In our region, three out of four wells drilled is a commercial success,” Oussa said.

“Also, we’ve had a very successful relationship with Great Artesian, which has operated three discoveries for us, including Rossco-1, which we are excited about bringing online in the next six to nine months.”

The farm-out to Odin concerns the “highly prospective” Spinel Block in the Great Artesian Oil and Gas-operated PEL 106 permit, in which Blue Energy owns 50% subject to its own farm-in obligations.

In return for a 25% stake over the block, Odin has agreed to fully reimburse the $4.6 million it cost Blue Energy to undertake the recently completed 360 square kilometre Spinel 3D seismic survey.

The survey is expected to provide detailed seismic imaging across a number of previous gas/condensate discoveries, which will aid in planning future development drilling scenarios. This includes the Rossco-1 and Paprika-1 discoveries.

Once the data is interpreted, the Spinel Block joint venture will undertake a four-well drilling program starting in July.

“While interpretation of the 3D seismic data is still underway, we anticipate the data will give greater definition to the 21 high priority targets within the block,” Oussa said.

“The farm-out to Odin places the company in a sound position to complete its earn-in to the block and to participate in the numerous drilling opportunities that have been identified.”

Energy Investments officially changed its name to Blue Energy two weeks ago and started trading on the Australian Securities Exchange under the ticker “BUL.”

At the time, the company said the name change reflected its renewed focus on its growing suite of CSM and oil and gas assets.

The original company Blue Energy was acquired by Energy Investments in February last year.

Then last October, Oussa was appointed as managing director/chief executive of Energy Investments while Norm Zillman was appointed as chairman.

Oussa and Zillman were founding shareholders of Blue Energy and were substantially responsible for assembling the company's current assets.

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