Tapping into LNG

TAP Oil is aiming to improve its exploration record by drilling high-impact yet moderate-risk prospects in Australia and overseas, including acreage with serious potential for LNG production, chief executive Peter Stickland said yesterday.
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Stickland said Tap has an expanding portfolio of quality exploration opportunities and now has the people, equipment and processes to turn around its relatively poor exploration record.

"If we have a weakness, it would be our exploration track record," he said in a corporatefile.com.au open briefing released to the Australian Securities Exchange.

"The impact of the recent changes hasn't been widely recognised and we're not yet credited as having a quality exploration book."

Over the past few years, Tap has been implementing changes to its exploration focus.

It will spend $A60 million in 2008 pursuing a range of opportunities, with the pick of its Australian assets being the BHP Billiton-operated WA-351-P permit in the Exmouth Plateau region of Western Australia's Carnarvon Basin, in which Tap holds 25%.

This acreage is Tap's "key LNG asset", according to Stickland.

The former BHP Billiton Petroleum geophysicist said the block sits in one of the world's most attractive locations for gas and has about 20 leads with direct evidence of hydrocarbons on 2D seismic.

"US-listed E&P corporation, Hess Corporation, was recently awarded the block immediately adjacent to our permit by undertaking a 16-well, $500 million program," he said.

"We see low-risk, high-impact potential in WA-351-P of better than 10 trillion cubic feet unrisked potential.

"With the benefit of 3D seismic data to be acquired later this year, we think the chances of success will be high. From my past experience at BHP, I anticipate a success rate of 50 percent using high-quality 3D seismic data."

Stickland, who joined Tap in 2005 as its exploration manager before taking over as CEO in January, said he had a track record in the Carnarvon where he led BHP's exploration efforts.

"During that period, we discovered about 100 million barrels of oil," he said.