Whitebark Energy Limited has started a sale/farm-out process for its 100 per cent owned Warro gas field, located in Retention Lease 7, 200 kilometres north of Perth, Western Australia.
According to Whitebark, the process is a culmination of a strategic review of the asset over the last 12 months together with increased interest in the project in the current Western Australian gas market environment.
The gas field is ideally positioned just north of the large approximately 650 Terajoule (TJ) per day Perth market and is 30 kilometres east of both the Dampier-Bunbury Natural Gas Pipeline and the Dongara-Perth Parmelia Pipeline which gives full access to the 1,200 TJ per day WA gas market.
Whitebark’s Managing Director David Messina detailed that the Warro field contains an ‘enormous amount of gas’, but that it requires an operator with the expertise to commercialise a technically challenging field and leverage off the work that has already been undertaken.
“Whitebark has had success at the Wizard Lake oil project in Canada and will continue to focus there,” Mr Messina said.
“The lifting of the Moratorium in WA and the increasing interest in new gas sources in WA means that we can identify and consider options on how best to develop and realise value from our remaining Western Australian asset.”
Several factors combined convinced Whitebark that it was the right time to market Warro including:
- Suitable drilling rig now active in the Basin (Ensign 970) which should be available in the future to drill Warro, and without large relocation costs.
- Changing dynamics in the supply of domestic gas from looming changes in the North West Shelf.
- Recent application to drill and hydraulically fracture a well in the Canning Basin by Black Mountain Oil and Gas / Bennett Resources Pty Ltd is providing a pathway through the regulatory framework following the lifting of WA’s hydraulic fracture moratorium:
- Recent support by WA Government for Perth Basin gas field developer Strike Energy Limited through the award of Lead Agency Status;
- Advances in completion techniques provide opportunity to revisit the field;
- Renewed interest by Talon Petroleum Limited in the Cattamarra sands at Walyering, a reservoir unit which is also present at the Warro field location.
The Warro reservoir section is about 3,750 metres below surface and has a thickness of approximately 500 metres. The gas is held within low porosity and low permeability Jurassic sandstones.
An approved pipeline licence and a Native Title Agreement with the Yued people allows for field operations through development and production to take place.
The company may consider an outright sale, farm-in or an alternative transaction structure.