DRILLSEARCH ENERGY LIMITED 
By DRILLSEARCH ENERGY LIMITED December 2011
DRILLSEARCH ENERGY LIMITED
December 2011
Highlights
Discovery of a new oil field
at Basham-1 on the Western Flank with potential upside implications for the northern extension to the Bauer Oil Discovery. The Basham discovery brings Drillsearch's success rate for the most recent
Western Flank Oil campaign to 89%.
Development of the Western Flank Oil Fairway
currently underway with the completion of a 2D and two
3D seismic surveys and an independent Reserves review expected to be announced by the end of the March quarter 2012.
Gas Sale Agreement signed
with South Australian Cooper Basin Joint Venture allowing the immediate commercialisation
of the existing Middleton and
Brownlow wet gas discoveries.
Cash
position at 31 December 2011 of $33.7 million with no debt.
Commenced
Wet Gas four well exploration campaign in PEL 106B
with Baird-1 being cased and suspended for future evaluation.
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DRILLSEARCH ENERGY LIMITED
December 2011The Managing Director's comments
The December quarter 2011 was one in which we built on our successes in the Western Flank Oil Fairway and developed our opportunities in our Wet Gas business.
Further, the period saw ever increasing interest in the shale
gas potential of the Cooper Basin.
Our peers as well as global oil and gas players are
increasingly recognising the benefits of shale gas
exploration in the Basin due to its developed infrastructure
network.
During the quarter, we continued to see successful results
from our development program on the Western Flank Oil Fairway
in PEL 91. The Joint Venture progressed the development of
the Bauer Oil Discovery with the completion of three new
production wells making it one of the largest oil discoveries
in the Western Flank Oil Fairway. We also experienced success
at Basham-1 with the
discovery of a new oil field marking the fifth new oil
discovery in the Western Flank Oil Fairway and an 89% success
rate in this current drilling campaign.
An independent Reserves review of the PEL 91 Oil Discoveries
is underway with completion expected by the end of the March
quarter 2012. To build on our success in the Western Flank
Oil Fairway and following the completion of 2D and two 3D
seismic surveys, we have commenced planning for a new
exploration campaign.
In our Wet Gas business, we signed a Gas Sales Agreement with
the South Australian Cooper Basin Joint Venture. This
milestone Agreement, for an initial rate of 25 mmscfd raw
gas, allowed for the immediate commercialisation of our
existing Wet Gas discoveries at Middleton and Brownlow. With
construction completed at the Pilot Project, post 31 December
2011, the Joint Venture announced production had commenced at
PEL 106B. Encouragingly, the Pilot Project not only generates
revenue for Drillsearch but also provides important
production performance data to support higher value, longer
term plans.
As part of our continuing Wet Gas exploration drilling
campaign, the Joint Venture commenced a four well exploration
drilling campaign in the Western Wet Gas Fairway. At PEL
106B, the Joint Venture spudded the first exploration well
Baird-1 in the December quarter. Baird-1 has been cased and
suspended for future evaluation with the remainder of the
exploration campaign continuing in 2012.
Managing Director
Discovery of a new oil field
at Basham-1 on the Western Flank with potential upside implications for the northern extension of the Bauer Oil Discovery. The Basham discovery brings Drillsearch's success rate for the most recent
Western Flank Oil campaign to 89%.
PEL 91 - Chiton oil storage tanks 2
DRILLSEARCH ENERGY LIMITED
December 2011Production and Revenue
The Chiton Oil Field in PEL 91 was shut-in for the majority
of the quarter due to road access issues and a lack of
available pipeline capacity, however, 1,849 bbls of oil
(gross) was produced from Chiton over a six day period in
December. Oil production for the December quarter from the
Tintaburra Oil Fields (ATP 299P) totalled 13,689 bbls, an 18%
decrease over Tintaburra's production during the prior
quarter (16,699 bbls).
It is anticipated that production from PEL 91 will resume
from Chiton in the March quarter 2012 and first production
from the newly discovered Bauer Oil Field will be brought on
line during the June quarter 2012. The Hanson and Snellings
Oil Fields will be brought on line as export capacity is
increased during the year.
PEL 91 production from March 2012 will be constrained to
2,000 gross bbls per day (net to Drillsearch 1,200 bbls/day)
due to trucking constraints. A pipeline capable of
transporting 5,000 gross bbls per day (3,000 bbls net to
Drillsearch) from a hub at Bauer is being discussed by the
Joint Venture, with a preliminary aim of having a pipeline
operational later in 2012.
Sales revenue for the December quarter was $1.7 million,
which is a 41% decrease over the previous quarter ($2.9
million). Drillsearch sold
15,250 bbls in the quarter and realised an average oil price
of $113 (prior quarter $114). This reduction in sales revenue
reflects the timing of shipments.
8.0
7.0
6.0
5.0
4.0
3.0
2.0
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
1.0
0.0
Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11
10,000
5,000
-
Pipeline inventory sales
Revenue
Production
Development of the Western Flank Oil Fairway
currently underway with the completion of a 2D and two
3D seismic surveys and an independent Reserves review expected to be announced by the end of the March quarter 2012.
PEL 91 - Five well drilling campaign 2011, Snelling-1 drilling activity 3
DRILLSEARCH ENERGY LIMITED
December 2011Development and Exploration
Oil Business
The December quarter saw the final well in the Western Flank
Oil Fairway exploration campaign, Basham-1, cased and
suspended for future evaluation of an Intra Birkhead oil
discovery. This was the fifth successful exploration well
drilled from a six well drilling campaign and combined with
three Bauer development wells cased and suspended as future
producers, gives the PEL 91
Joint Venture's an impressive 89% success rate for the
campaign
(Drillsearch 60%, Beach Energy 40% and Operator).
The PEL 91 Joint Venture intends to transport initial
production from the PEL 91 Discoveries via a trucking
operation. First oil production
is targeted for the March quarter 2012, at an expected 1,200
barrels of oil per day (bopd) net to Drillsearch.
The 320km2 Aquillus 3D seismic survey in PEL 91
was completed, although delayed by wet weather and bush fires
started by lightning strikes. The crew commenced the
151km2 Limbatus 3D seismic survey in the same
permit, and by the end of the period it was 38% complete.
WESTERN FLANK OIL FAIRWAY PEL 91, COOPER-EROMANGA BASIN
INLAND-COOK OIL FAIRWAY, COOPER-EROMANGA BASIN
Source: Drillsearch Energy Ltd
An independent Reserves review of the PEL 91 Oil Discoveries
is
being undertaken with completion expected by the end of the
March quarter 2012. Drillsearch have estimated, on a
preliminary basis, the New Oil Discoveries have added 2.6
mmbbls to its 2P oil Reserves.
Source: Drillsearch Energy Ltd
Gas Sale Agreement signed
with South Australian Cooper Basin Joint Venture allowing the immediate commercialisation
of the existing Middleton and
Brownlow wet gas discoveries.
The ATP 299P Joint Venture (Drillsearch 11%, Santos 89% and
Operator) is maturing a number of drilling opportunities for
drilling in 2012 based primarily upon the newly acquired
Tintaburra 3D seismic survey, including a mix of near field
exploration, appraisal
and development wells. An eight well optimisation and
recompletion program is expected to commence later in
2012.
Drillsearch has entered into the tender phase for 3D seismic
acquisition in ATP 539P and ATP 549P in the Inland-Cook Oil
Fairway,
a set of five contiguous South West Queensland Blocks that
run along the Queensland border of the Cooper Basin (see
map). This Fairway remains in the early stages of the
exploration cycle with the Company hopeful of demonstrating a
similar play concept to what has proved so successful on the
Western Flank Oil Fairway.
4
DRILLSEARCH ENERGY LIMITED
December 2011Development and Exploration
Wet Gas Business
During the December quarter, the PEL 106B Joint Venture
(Drillsearch 50%, Beach Energy 50% and Operator) signed a Gas
Sale Agreement (GSA) with the South Australian Cooper Basin
Joint Venture (SACB) (Santos 66.60%, Delhi Petroleum 20.21%
and Origin Energy 13.19%). The GSA is on an interruptible
basis for a term to 30 April 2013 subject to a minimum
quantity to be taken by the SACB Joint Venture.
Production of wet gas from the Middleton and Brownlow Pilot
Project, and sales to the SACB Joint Venture commenced in
early January 2012. The initial production rate post
commissioning is expected to be sustained at 25 mmscf/d raw
gas comprising about 15 TJ/d sales gas, and
1,250 bbls per day of LPG and condensate, higher than
previous expectations.
WESTERN WET GAS FAIRWAY, COOPER-EROMANGA BASIN
As a result of the GSA, Beach and Drillsearch agreed to a
four well drilling campaign in PEL 106B. This campaign
commenced with Baird-1 in PEL 106B which was cased and
suspended for future evaluation of potential deep coal seam
gas and tight oil bearing sands. The second exploration well
in the program,
Admella-1, spudded on 4 January 2012.
In November 2011, ATP 940P was formally awarded to
Drillsearch by the Queensland Government. The commencement of
the ATP 940
Joint Venture with QGC is subject to approval by the
Government of the transfer of the interest in the permit to
QGC. Drillsearch is operator of the permit with a 40%
interest.
Geological and geophysical work has been ongoing during the
quarter. In addition, Drillsearch is continuing with its plan
to acquire a large 3D seismic survey in ATP 940P.
ATP 940P
Source: Drillsearch Energy Ltd
Source: Drillsearch Energy Ltd
Commenced Wet Gas four well exploration campaign in PEL 106B
with Baird-1 being cased and suspended for future evaluation.
5
DRILLSEARCH ENERGY LIMITED
December 2011Financial Position
Drillsearch remains in a sound financial position. The cash
balance at the end of December 2011 was $33.7 million with no
debt.
The financial information presented in this report is
unaudited. A net loss is anticipated for the Company in the
half year ended
31 December 2011. This loss is expected to be an improvement
on the half year loss for 31 December 2010 of $4.4 million.
Production summary
3 months ended December 2011 3 months ended September 2011 Quarter Change %Oil Production boe 33,216 15,512 17,704 -12% Total Production boe 33,216 15,512 17,704 -12%
Sales revenue
Oil A$ 4,641,205 1,721,973 2,919,232 -41% Total Sales Revenue A$ 4,641,205 1,721,973 2,919,232 -41% Realised Sales Price/bbls A$/bbls 113.7 112.7 114.0 -1%
Direct operating expense
Oil A$ 1,746,768 945,135 801,633 18% Wet gas A$ 5,457 5,457 - N/A Total direct operating expense A$ 1,752,225 950,592 801,633 19%
Oil & gas asset expenditure
Oil A$ 7,543,143 4,352,164 3,190,979 36% Wet gas A$ 4,825,262 1,821,285 3,003,977 -39% Total oil & gas asset expenditure A$ 12,368,405 6,173,449 6,194,956 0%
Exploration & evaluation expenditure
Oil A$ 8,603,691 4,262,598 4,341,094 -2% Wet gas A$ 2,529,569 1,829,101 700,468 161% Unconventional A$ 759,521 502,861 256,660 96% Corporate activity A$ 476,545 239,356 237,189 1% Total exploration & evaluation expenditure A$ 12,369,326 6,833,916 5,535,411 23%
Financials
Cash & Cash Equivalents A$ 33,664,130 33,664,130 44,591,367 -25% Debt A$ None None None N/A Hedging A$ None None None N/A
Cash
position at 31 December 2011 of $33.7 million with no debt.
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DRILLSEARCH ENERGY LIMITED
December 2011Further information
For further information please contact: Brad Lingo
Managing Director
Ph: +61 2 9249 9600
Email:
admin@drillsearch.com.au
Or visit the website
www.drillsearch.com.au
Media enquiries to: David Greer at
Radar 02 8256 3333/3307.
If you would like to register for email alerts please go to
the Register Page on our website.
DRILLSEARCH PERMIT AREAS, COOPER-EROMANGA BASIN
Source: Drillsearch Energy Ltd
About Drillsearch Energy Limited (ASX: DLS), which listed on ASX in 1987, explores and develops conventional and unconventional oil and gas projects. Drillsearch has a strategic spread of petroleum exploration and production acreage in Australia's most prolific onshore oil and gas province, the Cooper-Eromanga Basins in South Australia and Queensland. The Company's focus is on 'brownfields' exploration where geological risk is reduced and there is access to existing infrastructure, ensuring that any discoveries can be brought into production. Competent Person StatementInformation on the Reserves and Resources in this release is based on information provided to the company by Beach Energy Ltd as operator of the PEL 91 and PEL 106B Joint Ventures and compiled for all other assets by Mr David Evans, Chief Technical Officer of Drillsearch who has given his consent as of the date of this release to the inclusion of this statement and the information in the form and the context in which they appear in this release.
Level 16 , 55 Clarence Street
Sydney NSW 2000
Australia
P: +61 (02) 9249 9600
F: +61 (02) 9249 9630
E:
admin@drillsearch.com.au
www.drillsearch.com.au
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| Documents associés | |
| Quarterly Report December 2011 |
