MEC Resources ‘peps’ up
In September 2015, MEC Resources (ASX:MMR) announced a revised future drill target within PEP11 in the offshore Sydney Basin.
PEP 11 is a region of the Basin immediately adjacent to the largest gas market in Australia and is a high impact exploration project.
MEC Resources advised the market recently that it had identified a revised drill target on the Baleen Prospect on seismic line B4-18 with a total depth of 2150 metres.
The proposed exploration works is being undertaken by Advent Energy, an unlisted oil and gas exploration company held by major shareholders MEC Resources, BPH Energy (ASX:BPH), Grandbridge (ASX:GBA) and Talbot Group Investments.
Advent has a portfolio of near term development and exploration assets, including conventional and unconventional petroleum targets.
PEP 11 is held 85% and operated by Asset Energy Pty Ltd, a wholly owned subsidiary of Advent.
The drilling target at Baleen is in 125m of water and was found to be analogous with existing producing fields.
A seismic survey is currently being conducted covering approximately 200 line kilometres, which will assist in the future drilling of this target – approximately 30km south east of Newcastle, NSW.
Meanwhile the potential rigs available to drill the area are also being evaluated.
Future drilling will be subject to final technical review and will require further fund raising or joint venture.
A recent geochemical report reviewed the hydrocarbon analysis performed on sediment samples obtained within PEP11 during 2010.
The 2010 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 new report features further analysis of that initial investigation and supports that the proposed drilling site at Baleen appears best for hydrocarbon influence relative to background samples.
“The geochemical data acquired in 2010 supports the identification of reliable backgrounds and also primary hydrocarbon influence locations, despite active gas seeps which appear ubiquitous throughout the area of interest,” states the report.
“The Baleen Prospect appears to hold a higher probability of success than other prospects.”
PEP11 is important in the current oil and gas climate and could provide a suitable fuel for long term base load power generation in NSW.
This is particularly important as politics and self-interest groups continue to stall the production of oil and gas onshore NSW.
While PEP11 is a major play, MEC Resources is also focused on a well in EP36 in the onshore Bonaparte Basin in the north of Western Australia, where investee Advent has commenced preparations for drilling.
Advent is currently sourcing costs and availability of drilling rigs for an exploration well to be completed by 31 March 2017.
Again, the well be subject to appropriate fund raising.
Advent’s 100% interests in EP386 and nearby RL1 are held by wholly owned subsidiary Onshore Energy Pty Ltd.
The Bonaparte Basin is a highly prospective petroleum basin with significant reserves of oil and gas – it is Australia’s third most prolific offshore hydrocarbon producing basin.
Of the nine wells already drilled within EP386, six have flowed gas to the surface at various rates up to 2.1 MMscf/d, and all have demonstrated evidence of the presence of hydrocarbons.
There is rapid infrastructural development in this Kununurra region, including the Ord River Irrigation Areas. There are also numerous resource projects in progress and the world-scale aquaculture project (Project Sea Dragon).
It puts Advent in a strong position to further its ambitions and the company has now entered into discussions and letters of intent for potential gas supply with several large gas potential gas consumers.
The wash up
MEC Resources is strategically placed to capitalise on the positions Advent has placed itself in.
While EP386 looks promising, it is the play offshore NSW that is raising most eyebrows.
The oil and gas market is effectively stalled as politicians and interest groups are at a major impasse, which is having a negative effect on gas prices for the average consumer.
Should Advent be able to prove up a gas resource offshore, then it may just be able to do some good for the NSW gas market.
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