Real Energy JV preferred bidder for highly prospective gas acreage
In a potentially transformational development for Cooper Basin focused oil and gas company, Real Energy Corporation Limited (ASX:RLE), management has informed the market of the group’s appointment as a joint venture preferred bidder for the Queensland Government’s coal seam gas acreage in the highly prospective Walloon Fairway near Miles in Queensland.
Real Energy’s 50/50 joint venture partner is Colorado based Strata-X Energy (ASX:SXA), a company that is actively engaged in oil and gas exploration and development in the states of California and Illinois.
The joint venture partners had to engage in a competitive tender process in order to be appointed as preferred bidders for acreage PLR2019-1-11.
This acreage has been attributed the name Project Venus by the joint venture partners.
In terms of prospectivity, Venus contains high quality and very prospective acreage covering 153 square kilometres which is within the main Walloon Fairway and close to gas infrastructure.
Its location within the prolific coal seam gas producing Surat Basin, as well as its proximity to other power stations and gas plants can be seen in the following map.
Bringing Venus into production
The joint venture partners aim to bring Project Venus into production in the next few years.
Executive chairman Strata X, Ron Prefontaine’s experience is likely to be vital in terms of commercialising such a project.
He was previously executive director of Arrow Energy during its formative years and the founding managing director of Bow Energy Limited.
Arrow is now jointly owned by Shell and PetroChina in a 50-50 joint venture, operating from five fields in Queensland’s Surat and Bowen basins
Drawing on his past experience in the region, Prefontaine appeared confident regarding the prospects of PR2019-1-11 in saying, “Having run successful exploration and reserves programs in the Walloon Fairway previously, I know exactly what is required to convert the vast prospective resources in PR2019-1-11 to reserves.
‘’Once material reserves are proven, given the nearby pipeline and infrastructure, our goal is to fast track field development to create early cash flows.
We are planning to commence field work early in the second quarter of 2020 and our immediate focus will be to prove commercial gas flows, a required precursor to predictable reserves certifications.”
Of course, Real Energy already has substantial acreage in the Cooper Basin, and it brings extensive exploration experience to the table.
The company’s landholdings are outlined in black in the following map.
Commenting on today’s developments, managing director Scott Brown said, “We are delighted that the Queensland Government has selected our Joint Venture as the preferred bidders for this block.
‘’It illustrates the quality of our tender and the confidence that the government has in recognising the collective expertise we bring to developing this asset into another successful Queensland CSG field.
‘’This is high quality gas acreage and we see tremendous potential of this significant gas resource.
‘’We look forward to working collaboratively with Strata X to develop Project Venus.”
The timing of the Windorah Gas Project couldn’t be better as demand for gas from the east coast is expected to outstrip supply in the near term.