BPH ready to cash in on high profile energy investments

By Jonathan Jackson. Published at Nov 26, 2019, in Energy

While BPH Energy (ASX:BPH) has some interests outside the energy sector, the company’s key focus and major investment is in Advent Energy Ltd, an unlisted oil and gas exploration and development company with onshore and offshore exploration and near-term development assets around Australia.

The group’s 22.6% direct interest in Advent has provided the company with exposure to high profile assets in the onshore Bonaparte Basin area north of Western Australia and Northern Territory, as well as PEP 11 (85%) in the offshore Sydney basin.

Regards the latter, through its wholly owned subsidiary Asset Energy Pty Ltd, Advent holds 85% of Petroleum Exploration Permit PEP 11 – an exploration permit prospective for natural gas located in the Offshore Sydney Basin.

PEP 11 is a significant offshore exploration area with large scale structuring and potentially multi-trillion cubic feet (Tcf) gas charged Permo-Triassic reservoirs.

Mapped prospects and leads within the Offshore Sydney Basin are generally located less than 50 kilometres from the Sydney-Wollongong-Newcastle greater metropolitan area and gas pipeline network.

The following shows production testing at Waggon Creek-1, part of exploration licence EP 386.

Updated data supports previous findings

Advent had previously interpreted significant seismically indicating gas features indicating hydrocarbon accumulation following a review in 2004.

This data was reprocessed in 2010 and a geochemical report supported the potential for an exploration well within that area.

The 2010 geochemical investigation utilised a proprietary commercial hydrocarbon adsorption and laboratory analysis technique to assess the levels of naturally occurring hydrocarbons in the seabed sediment samples.

The report supports that the area surrounding the proposed drilling site on the Baleen prospect appears best for hydrocarbon influence relative to background samples.

In addition, the report found that the Baleen prospect appears to hold a higher probability of success than other prospects.

Independent research supports prospect of commercial discovery

Importantly, an independent research article published in The Leading Edge on surface geochemical exploration for oil and gas was extremely positive in terms of backing up management’s confidence regarding a commercial discovery.

BPH chairman, David Breeze referred to this report in saying “A recent review of more than 850 wildcat wells – all drilled after geochemical surveys – finds that 79% of wells drilled in positive anomalies resulted in commercial oil and gas discoveries.”

Advent has demonstrated considerable gas generation and migration within PEP11, with the mapped prospects and leads highly prospective for the discovery of gas.

Further, the group has conducted a focused seismic campaign around a key drilling prospect in PEP11 at Baleen, in the offshore Sydney Basin.

The high resolution 2D seismic survey covering approximately 200-line kilometres was performed to assist in the drilling of the Baleen target approximately 30 kilometres south-east of Newcastle, New South Wales.

A drilling target on the Baleen prospect at a depth of 2150 metres subsea has been identified in a review of previous seismic data.

Intersecting 2D lines suggest an extrapolated 6000 acre (24.3 square kilometres) seismic amplitude anomaly area at that drilling target.

The report on this drilling target noted previous 2D seismic data showed that the Permian aged section of the Bowen Basin has producing conventional gas fields at a similar time and depth to PEP11 at the Triassic/Permian age boundary.

Best estimate 356 bcf of gas in EP386

Advent Energy through wholly owned subsidiary Onshore Energy Pty Ltd, holds 100% of each of EP 386 and RL 1 in the onshore Bonaparte Basin in northern Australia.

The Bonaparte Basin is a highly prospective petroliferous basin, with significant reserves of oil and gas.

Most of the basin is located offshore, covering 250,000 square kilometres, compared to just over 20,000 square kilometres onshore.

Within EP386, recoverable resource estimates range from 53.3 Bcf (Low) to 1,326.3 Bcf (High) of Prospective Resources, with a Best Estimate of 355.9 Bcf of gas.

Management also highlighted that there was prospectivity in both the onshore and offshore areas of the Bonaparte Basin for unconventional resources.

Advent has identified significant shale areas in EP386 and RL1, calculating a prospective resource best estimate of 9.8 trillion cubic feet.

2C contingent resource in the Northern Territory

In the Northern Territory, Advent holds Retention Licence RL1 (166 square kilometres in area), which covers the Weaber Gas Field, originally discovered in 1985.

Advent has previously advised that the 2C Contingent Resources for the Weaber Gas Field in RL1 are 11.5 billion cubic feet (Bcf) of natural gas following an independent audit by RISC.

Significant upside 3C Contingent Resources of 45.8 Bcf have also been assessed by RISC.

The rapid ongoing development of the Kununurra region in northern Western Australia, including the Ord River Irrigation Area phase 2, the township of Kununurra, and numerous regional resource projects provides an exceptional opportunity for Advent to potentially develop its nearby gas resources.

Indeed, the Ord River Irrigation Scheme could even be expanded as both sides of politics concede what a lifesaver it has been in terms of drought proofing the region.

The concept isn’t rocket science - the monsoon rains come every year without fail, fill the dam, which then provides both water and hydroelectricity to towns such as Kununurra and Wyndham.

Market studies have identified a current market demand of up to 30.8 TJ per day of power generation capacity across the Kimberley region that could potentially be supplied by Advent Energy’s conventional gas projects in EP386 and RL1.

Consequently, while hydropower can provide electricity for nearby smaller communities, there remains a need for a conventional gas project.

Cortical Dynamics could be dark horse for BPH

While BPH’s interests in the energy sector are impressive, the company’s investment in medical device group Cortical Dynamics could yield substantial returns given it has reached a point where it is distributing state-of-the-art products both in Australia and overseas.

The company’s stake currently sits at 4.56%, but it has the right to increase this to 14%.

Cortical is an Australian based medical device technology company that has developed an industry disruptive brain function monitor independently described as “a paradigm busting technology from an Australian based device house that really gives a significant advantage in this space”.

The core product, the Brain Anaesthesia Response (BARM) monitor, was developed to better detect the effect of anaesthetic agents on brain activity, aiding anaesthetists in keeping patients optimally anaesthetised.

Importantly, its competitive advantage has been recognized by leading world experts in anaesthesia, and this recognition has flowed through to approval for use in Europe.

Cortical has received both TGA approval and the CE Mark and has now commenced its sales campaign.

It is worth noting that Cortical’s technology has a versatility that goes beyond depth of anaesthesia and may be applied to other EEG based markets, such as neuro-diagnostic, drug discovery and drug evaluation.

There may even be applications in the emerging Brain Computer Interface (BCI) market and pain response and tranquiliser monitoring for trauma patients in intensive care units.

The BAR monitor is protected by five patent families in multiple jurisdictions worldwide, consisting of 22 granted patents.

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