Petroleum Exploration Licences 6, 427 and 428
On 26 August 2008 ESG further expanded its exploration portfolio through an agreement with Orion Petroleum Limited (ASX: OIP) to farm-in to coal seam gas exploration acreage in the Bowen, Surat and northern Gunnedah Basins.
The farm-in arrangement involves the drilling of three coreholes, one in each of Petroleum Exploration Licences 6, 427 and 428 plus acquisition of 100 km of seismic within PEL 6. ESG will earn a 40% interest in coal seam gas rights of PEL 428 and a 50% interest in the coal seam gas rights of PELs 6 and 427. ESG also has the option to earn a further 25% interest in PEL 6 through drilling of a second corehole. ESG will operate the farm-in programme, with the first stage of the farm-in planned to be complete by year-end.
Geological investigations carried out since Orion acquired the farm-in permit areas have enabled ESG to delineate multiple, highly-prospective coal seam gas exploration targets. Through the farm-in, ESG’s coal seam gas expertise will be applied to quickly prove-up and commercialise the resource, providing further security of gas supply for NSW.
The farm-in areas cover in excess of 18,000 square kilometres to the north and west of ESG’s existing, primary exploration acreage in PEL 238. Target coals within the farm-in areas are generally younger than those within PEL 238, and include areas of Walloon coal development. An ESG internal estimate indicates that the prospects to be investigated as part of the first stage of the farm-in could contain a high-side prospective gas resource of 3,500 Bcf.
