The well, which successfully flowed at 1.1 million cubic feet per day over almost two months from the Velkerri B Shale, has defined a potential gas-in-place of 61Tcf within an area covering 1968sq.km over EP 76, EP 98, and EP 117 in the Beetaloo Sub-basin.

 

Origin announced the results this morning, as the company and its partners Sasol (35%) and original licence holder Falcon Oil & Gas (30%) submitted a discovery report to the Northern Territory government following last year's extensive testing of the Amungee NW-1H well, just before the fraccing moratorium came into force.

 

The results of all wells drilled to date and the regional seismic data assessed the potential for the Velkerri Formation to extend over some 10,000sq.km.

 

Origin said the B shale appears to have similarities with the Marcellus and Barnett shales in the US, and it has so far collected sufficient significant amounts of data from the Amungee NW-1H, Beetaloo W-1, Kalala S-1, McManus-1, Altree-2 and Walton-2 wells, and Santos' deep Tanumbirini-1, to support that conclusion.

 

The Velkerri B shale is interpreted to be the most continuous of the three individual targets within the Velkerri Formation shale gas play.

 

Last year's play-opening well was drilled some 600m into the B Shale and with 11 fracs flowed at rates that promise commerciality. 

 

The Schlumberger frac was one of the largest ever conducted in Australia.

 

"Origin is pleased to confirm it has submitted a report to the Northern Territory Government that indicates the existence of a material gas resource within the Beetaloo Basin," Origin CEO integrated gas David Baldwin said this morning.

 

"The Beetaloo Basin is the Territory's most prospective onshore basin for unconventional gas and our test results further confirm the region's outstanding shale gas potential. 

 

"Further exploration and appraisal activity will be required to progress our understanding of the play and mature the contingent resources to reserves."

 

The only additional data collection required are 3D seismic to determine inter-well shale properties, micro-seismic and tracer surveys to better understand the fracture networks, and bottom-hole pressure surveys to help define well spacing.

 

While Origin and its partners can drill further wells, without the ability for test fracs they are limited in value. 

 

The NT government has tasked an independent panel look again into the risks and controls needed if fraccing is to be allowed. 

 

The promise of the Beetaloo Sub-basin permits goes some way to explaining why Origin is keeping them within its core business unit, which includes its APLNG development and power generation business, and is not spinning them out.