Neon Energy Ltd. (ASX: NEN) has been awarded the WA-503-P offshore petroleum exploration permit, as operator and 100% working interest holder. It is the company’s first exploration permit in Australia, and is a result of Neon Energy’s expanded new ventures effort that began in mid-2013.
Block WA-503-P was awarded with a six-year term. The initial three-year primary term includes a work commitment to license 80 sq km (31 sq mi) of new broadband 3D seismic data and complete various geological and geophysical studies. Neon anticipates that the new seismic data will be acquired by early 2015. The secondary term is optional and includes an associated commitment to drill one exploration well.
Block WA-503-P is located offshore Western Australia within the Dampier sub-basin, inboard of the giant Northwest Shelf gas field complex and on trend with numerous oil and gas discoveries, including the Legendre and Hurricane fields. Water depths within the block range from 50 m to 70 m (164 ft to 230 ft), within the depth capability of jackup drilling rigs.
Neon Energy believes that applying new technology – in particular, broadband 3D seismic – will generate renewed exploration interest in the area. Broadband 3D seismic is an emerging technology that enables the recording of a much wider range of seismic frequencies than traditional 3D seismic, resulting in a high-resolution dataset that can be accurately correlated to regional well data and geology. This enables detailed mapping of subtle structural and complex stratigraphic features not readily identifiable on conventional 3D seismic data.
Two wells have been drilled within WA-503-P to date, with the Janus-1 well confirming the presence of a working oil system within the block, having discovered a 4-m (13-ft) oil column. The Hoss-1 well, located northeast of the block, encountered encouraging oil shows. The primary exploration focus in WA-503-P will be the hydrocarbon potential of Lower Cretaceous to Upper Jurassic basin margin fan deposits within the oil rich Legendre trend, situated along the eastern flank of the Lewis Trough.
The most recent discovery in the area, Hurricane, is believed to contain over 100 MMbbl of oil in place (plus associated gas and condensate) within a subtle structural/stratigraphic combination trap. This is one of the play types being targeted by Neon Energy in WA-503-P. The company has already identified four exploration leads based on existing 3D seismic data, the largest of which has potential for over 100 MMbbl oil in place within a series of stacked sandstone reservoirs.