Projects:  VIC/P57

Gippsland Basin Activities

3D Oil Limited was granted the VIC/P57 Exploration Permit, located in the north-west offshore Gippsland Basin, in April 2004 and has held it at 100% equity since that time. The initial six-year permit term expired in July 2011 and, following the required relinquishment of some of the original acreage, the permit has been renewed for another five years, commencing August 2011. The renewed permit area is as shown in the figure below.

Image: Gippsland Basin ‘Top of Latrobe Group’ map, showing exploration wells, oil and gas fields and pipelines, and the VIC/P57 Exploration Permit

Gippsland Basin Overview

Historically the Gippsland Basin has been the most prolific petroleum liquids province in Australia. It accounts for approximately 57 percent of Australia’s produced petroleum liquids. To date, almost 29000 PJ (4.8 billion barrels) of petroleum liquids and 17000 PJ of gas have been discovered from the more than 150 exploration wells drilled in the offshore Gippsland Basin, making it significant by world standards and achieving a technical success rate better than 40 percent.

VIC/P57 Overview

Since its renewal in August 2011, VIC/P57 is approximately 483 square kilometres in size, covering a geologically diverse area of the Northern Terrace and the Central Deep areas of the offshore Gippsland Basin. It also contains the West Seahorse oil field, located a few kilometres west of the producing Seahorse Field. A drill stem test in main oil zone of the 1981 discovery well, West Seahorse-1, flowed 1800 bopd through a half-inch choke.

VIC/P57 is flanked to the south by several oil and gas fields including the giant Barracouta and Snapper gas fields. These are located on a large regional anticline, which is interpreted to shield the VIC/P57 region from significant gas charge. Consequently it is thought unlikely that any oil accumulations in VIC/P57 will have been displaced by gas. Other oil and gas fields on the southern flank of the permit include Golden Beach, Mulloway/Whiptail, Seahorse, Wirrah, Whiting, Emperor and Sweetlips. In recent years exploration wells along trend of prospects and leads in VIC/P57 have intersected hydrocarbons, including West Whiptail-1, Longtom-2, Grayling-1A, West Moonfish-1, North Wirrah-1 and South East Remora-1. Within VIC/P57, the 2008 Wardie-1 exploration well also encountered oil shows. All of these targets were located from mapping of Esso’s Northern Margin 3D seismic survey.

VIC/P57 Work Programme

The approved minimum work programme for the five-year renewal period is as shown below.

Reprocessing of the Northern Fields 3D seismic data has been unavoidably delayed, but is expected to be completed in October 2011, after which the interpretation will begin in earnest.

West Seahorse

The discovery of oil in the West Seahorse structure in 1981 by Hudbay Oil Australia Limited followed the oil discovery in the neighbouring Seahorse Field by Esso in 1978. Hudbay reported the well intersected two separate oil-bearing zones in the upper section of the Latrobe Group. These correlate to two of the oil reservoirs in the Seahorse field, labeled the N1 and N2.6 reservoir sands by Esso. The N1 sand, flowed 1800 bopd through a half inch choke. The oil is mildly biodegraded, paraffinic with a low gas oil ratio. In 1982, Hudbay drilled a follow-up well, West Seahorse-2, which only recovered a small quantity of oil from an RFT in a thin sand in the upper Latrobe Group, but provided an indication of controls of reservoir continuity.

3D Oil drilled the West Seahorse-3 appraisal well in April 2008. Both the N1 and N2.6 oil zones were encountered in excellent reservoir sands and the well was suspended for future production.

The Wardie-1 exploration well was drilled in May 2008 to test a separate structural culmination on the south-west flank of the field. Target reservoirs in the well came in deep to prognosis, but oil was encountered in the upper Latrobe Group, stratigraphically higher than the N1 unit that is oil-bearing in the West Seahorse field. Wardie-1 was plugged and abandoned, but the oil encountered may be considered for a future tie-in to the West Seahorse field.

West Seahorse Development Planning

Subsequent to drilling West Seahorse-3, 3D Oil has continued to review various development concepts to identify the most economic option for producing West Seahorse. The option considered most profitable is production via a subsea well-head and 8” pipeline to an onshore crude oil stabilization plant, from which oil would then be transported by road tanker to a selected refinery.

Image: Potential pipeline routes offshore and onshore for the sub-sea development

Image: 3D depth image of the N1 reservoir

> Return to top

VIC/P57 Exploration

Despite its proximity to numerous hydrocarbon discoveries, the VIC/P57 permit is lightly drilled, containing only four wells, all drilled in or immediately adjacent to the West Seahorse field. However, in addition to West Seahorse, VIC/P57 contains several prospects and leads. Extensive interpretation of the Northern Fields 3D seismic survey and new data post-drilling has been incorporated into 3D Oil’s permit-wide mapping of the prospects and leads, resulting in improved confidence in the depth maps, particularly of the upper Latrobe Group section. Ongoing evaluation of the Golden Beach and Emperor Subgroups has resulted in improved understanding of the distribution of these fairways across the permit and better definition of the new leads within these strata.

Extensive reprocessing of the Northern Fields 3D seismic data over VIC/P57 and adjacent areas is currently being undertaken to enable improved evaluation of the permit’s prospectivity, especially at the deeper levels.

Image: VIC/P57 Prospects and Leads

> Return to top

Felix

The Felix Prospect is located between the Moonfish/West Moonfish and Wirrah fields, with closure mapped at multiple levels from the intra-Latrobe into the Golden Beach Subgroup. Both Moonfish and Wirrah have multiple levels of trapped hydrocarbons, and Felix is also predicted to contain stacked hydrocarbon columns. The recoverable volume range is about 15-80 MMstb, depending on the number of successful levels.

Sea Lion

Sea Lion is located to the west of the West Seahorse oil field, on an extension of the oil fairway. It is a simple structural closure against the Rosedale Fault with the potential for oil at multiple levels. This play type has historically had a very high success rate in the Gippsland Basin. The most likely recoverable volume is assessed as around 20 MMstb, but there is potential for greater volumes if hydrocarbons are confirmed at multiple levels.

Golden Beach and Emperor Subgroup Leads

The Golden Beach and Emperor Subgroup plays include the Lucifier, Dexter and Kangafish leads, which are low-side, fault-dependent structures associated with the Emperor fault along the basin’s northern margin. The leads are of similar trapping styles, and on trend with other northern margin discoveries to the east, such as the Longtom, Remora, Sunfish and Kipper fields. These play types also have the potential to occur beneath some of the upper and intra-Latrobe Group prospects and leads, such as Felix and Sea Lion, which may result in the possibility of evaluating them in the same exploration well as a shallower target.

Salsa

The Salsa lead, to the north east, is a top of Latrobe Group closure and provides attractive follow-up potential to a success at Sea Lion. It straddles the edge of the existing 3D seismic data, but has the potential to be of significant size.

Scooter

The Scooter lead is another top of Latrobe Group closure, in this case on a migration spill chain out of the Emperor and Sweetlips discoveries,. The feature is primarily erosional, created by the Marlin Channel. Both Emperor and Sweetlips have oil legs in the upper Latrobe Group, and are close to their spill points.