Transerv Energy: Independent review doubles size of Warro gas field

Transerv Energy has announced that an independent assessment has doubled the size of its Warro onshore gas field in WA. The new figures from RISC Advisory suggest a Contingent Resource Low estimate of 2.4 trillion ft³ of total gas initially in-place (GIIP). This is approximately double the amount previously assessed by Gaffney, Cline & Associates prior to the Alcoa farm-in work. This category is deemed to be the lowest-risk portion of the Resource and would be the basis of any project development.

The RISC assessment has increased the GIIP estimate to 11.6 trillion ft³ on a 100% basis. This is an increase of over 15% to the upside GIIP figure of approximately 10 trillion ft³ provided by the Shanley Review. The new Resource estimates follow the two latest highly successful wells which were drilled at Warro as part of the programme funded by Alcoa of Australia whereby Alcoa may earn up to 65% of the project.

Although accurate estimates for well deliverability will not be available until testing of Warro-5 and 6 is finished, previous estimates conducted as part of the Shanley Review gave the indication that wells drilled on a 20-hectare spacing could be expected to yield between 4 - 10 billion ft³ per well. The estimate of field unrisked recoverable resources has been done assuming 4.4 billion ft³ per well with a spacing of 20 hectares.

The results of the review by consultants RISC Advisory, highlight the immense potential for Warro to become a major player in the State’s domestic gas market. Recent work, published in September and October 2015 by Breakaway Research and Strachan Corporate, indicated NPV10 and NPV8 values for Warro gas of 82 cents/Gj and 69 cents/Gj respectively. Based on the lower of these valuations, the potential value of the recoverable resources at Warro is between US$900 million and US$3.7 billion (gross). These reviews assessed the risk associated with these valuations to be 40-50%.

Transerv Managing Director Stephen Keenihan said the RISC results were outstanding in terms of both the overall increase in the size of the resource and the reliability of it.

“The size of the prize we are pursuing at Warro is now substantial by any measure,” Mr Keenihan said. “It also demonstrates that Warro could be a highly valuable source of “offset gas” for the global LNG companies operating in WA. Under existing WA Government policy, these companies must reserve 15% of the gas they control in WA for domestic use. However, by acquiring an interest in gas fields such as Warro, they can source this gas from elsewhere in WA to meet their 15% obligation, meaning the fields, which underpin their LNG projects can be used solely for LNG production. In addition to these strong results, there is huge potential for further increases in the Warro Resource because we were still in gas when we stopped drilling the two latest wells.”

“Another 100 m of gas column would translate into a further 0.7 to 4.1 trillion ft³ of gas in place. This is significant because both the size and the reliability of the resource are central to the economic potential of the field.”

“Warro already enjoys the huge economic benefits which stem from its size and close proximity to WA’s major gas pipelines, including the Dampier-to-Bunbury pipeline,” continued Mr Keenihan. “These latest results further increase the potential to unlock the value of Warro.”

The field is located approximately 200 km north of Perth in RL’s 6 and 7.

Edited from press release by Angharad Lock

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/19112015/transerv-energy-independent-review-doubles-size-of-warro-gas-field-1767/