Explore Victoria
Project Portfolio and Prospectivity
Lakes Blue Energy has tenure over what the Company considers to be the most prospective areas of onshore Victoria (see figure below). Following expiry of a Victorian Government onshore exploration ban, which prevented onshore exploration from 2012 until 2021, and promulgation of a new regulatory regime in November 2021, the Company has been working towards securing approval to recommence exploration drilling activity.
FIGURE 1 | LAKES BLUE ENERGY’S VICTORIAN PETROLEUM EXPLORATION INTERESTS
The key prospects presently being pursued are outlined below
PETROLEUM EXPLORATION PERMIT 169 (PEP169):
Lakes Blue Energy has a 49% interest in PEP169 with Armour Energy Limited holding the remaining 51% interest. Operatorship of the permit is presently delegated by Armour Energy to Lakes Blue Energy.
The Company has two key exploration objectives within PEP 169 one of which, Enterprise North, was identified through a review of new transition zone seismic and which, given its prospectivity (in terms of both size and probability of success) has become a key priority of the Company.
ENTERPRISE NORTH
The Enterprise North prospect is located onshore in PEP 169, near the Otway and Athena gas processing facilities and the lona gas storage facility and is “on-trend” with the Enterprise (Beach Energy Ltd) and Minerva (Cooper Energy Limited) has fields. The Prospect is on trend with the large, offshore Enterprise and Minerva gas fields.
The reservoir rock at Enterprise North is the Waarre Sandstone, which is known to have high porosity (19-25%) and high permeability (1 to 10 Darcy). The Waarre Sandstone is capable of flowing gas at high rates, with 61 million cubic feet per day (MMscfd) achieved during testing of the nearby Enterprise-1 well, and with rates of up to 80 MMscfd expected once the gas field is developed (Source: Beach Energy Ltd, ASX Release dated 15 February 2021).
Seismic data from the Enterprise North Prospect has been correlated with that from known gas fields (enterprise and Minerva) to reduce subsurface risk. Gas charged sands interpreted in seismic studies carried out over the Enterprise North Prospect cause a bright amplitude anomaly on the seismic. The is illustrated in Figure 4, below, along with comparisons between Enterprise North, Enterprise and Minerva.
FIGURE 2 | LOCATION OF ENTERPRISE NORTH PROSPECT
FIGURE 3 | SEISMIC CONTOUR MAPPING
FIGURE 3A, 3B & 3C | COMPARISON OF SEISMIC CROSS SECTIONS
The Enterprise North Prospect covers as area of up to 1,170 acres. The prognosed thickness of the Waarre Sandstone at Enterprise North
is 115 metres, similar to that encountered by Beach Energy at the Enterprise gas field (Source: Beach Energy Ltd, ASX Release dated 15 February 2021). On this basis the prospective size of the Enterprise North resource is as tabulated below.
OTWAY-1
The Otway-1 well is to be a conventional well located adjacent to, but on the opposite side of a fault from, the existing lona gas field. The well will be drilled to a depth of approximately 1,500 metres and will target gas in both the Waarre Sands and the Eumeralla Formation, and oil in the Pebble Point Sandstone.
The Waarre Sands are the basis of historic gas production from thelona gas field and, at the Otway-1 location, are uplifted relative to the lona gas field. While the deeper Eumeralla Formation has not historically been developed for gas production it is also considered to be highly prospective and is a key target of the Otway-1 well. This is because, wherever that Formation has been historically penetrated, it has been gas charged and, at nearby locations. has historically flowed gas at commercial rates. The Company’s share of the prognosed Otway-1 resource is 11.25 Bcf of gas (based upon gross 17 Bcf in the Eumerella and 5.5 Bcf in the Warre) and 185,000 barrels of oil.
PETROLEUM RETENTION LEASE 2 (PRL2):
Lakes Blue Energy has 100% interest in PRL2 which contains the Wombat and Trifon/Gangell Gas Fields. The presence of gas within the Wombat and Trifon / Gangell gas fields is beyond doubt. The fields contain independently certified Contingent Resources of gas, with existing gas wells already capable of gas production.
The Company intends to drill the Wombat-5 well, a conventional directionally drilled well targeting the upper, more permeable section of the massive gas saturated Strzelecki Formation, as soon approval is secured and funding is available. Work to secure approval for drilling of the well has commenced.
Based upon independent modelling Lakes Blue Energy is optimistic that the Wombat-5 well will flow gas at an initial rate of around 10 TJ/d, rendering both the well and the wombat Gas Field commercial.
Given the onshore location of the Wombat Gas Field, close to existing gas pipeline infrastructure, it is expected that the field could be brought online quickly (circa 18 months) and at low cost. With a gas production potential of around 20 PJ/a, development of the Wombat Gas Field could provide quick relief for both the ongoing, and likely worsening, Victorian gas supply shortfall and the high gas prices that have resulted from it.
In the longer term, as gas production from the Wombat field declines, the Trifon / Gangell field will be brought online.
FIGURE 4 | LOCATION OF PROPOSED
OTWAY-1 GAS WELL
FIGURE 5 | LOCATION OF PLR2
FIGURE 6 | FLARING OF GAS AT
WOMBAT-1 GAS WELL
FIGURE 7 | CROSS-SECTION, WOMBAT-5 WELL
PETROLEUM EXPLORATION PERMITS 167 AND 175 (PEP167, PEP175):
Lakes Blue Energy has a 100% interest in PEP175 & PEP175, which were acquired in September 2014 and form the basis of the company’s ‘Portland Energy Project’. The Portland Energy Project is based upon a Focus Area in the southwestern corner of PEP175, to north of Port Fairy, selected for investigation on the basis of historic seismic and drilling data, and in recognition of the potential for production of gas by conventional means. As is evident in Figure 15, there has been considerable historic drilling activity in and around the Focus Area, all of which has confirmed beyond doubt the presence of natural gas within the thick Eumeralla Formation. While gas was demonstrated to exist, the potential for its production was not historically tested since the search, at that time, was for oil, there was no market available for gas and no gas pipeline infrastructure was present. These circumstances have of course now all changed. Pipeline infrastructure is available and the Victorian gas market (indeed the eastern Australian gas market) is desperate for increased supplies of gas to curtail prohibitive gas price increases.
FIGURE 8 | PORTLAND ENERGY
PROJECT - FOCUS AREA
With independent expert assistance, the company has identified preferred locations for drilling of two proof-of-concept wells, Greenslopes-2 and Portland Energy-1. Both wells are to be conventional wells, drilled to a depth of around 1,500 metres with the
specific purpose of demonstrating that gas can be produced by conventional means from the Eumeralla Formation.
Lakes Blue Energy has commissioned independent assessemtns that confirm the gas-in-place potential of the Eumeralla Formation. As set out in Table 1, the estimated (50% probability) gas resource of the Focus Area is 11.5 trillion cubic feet, of which the Company considers around 3 trillion cubic feet should be recoverable by conventional means. The Portland Energy Project has the potential to fundamnetally change the landscape of gas supply into the eastern Australian gas market.