Bengal Energy has announced the acquisition of an additional 28.57% working interest in its operated natural gas prospective permit Authority to Prospect 934 (“ATP 934”) located in the under-exploited Cooper Basin natural gas fairway. Bengal has now consolidated its ownership of ATP 934 to 100%.
The purchase consideration is AUS$311,221 cash and potential future cash payments of up to AUS$1,000,000, subject to certain conditions and commercial benchmarks being achieved.
ATP 934 covers an area of 1,462 km2 (360,000 acres) and is immediately surrounded by natural gas fields. These adjacent fields have produced 93.7 billion cubic feet of natural gas and associated liquids to June 2016 and continue to produce in excess of 17 million cubic feet/day, with newly completed wells being tied in and further additional drilling on adjacent permits expected. Successful competitor drilling on adjacent tenements has occurred over the past two years with 20 natural gas wells drilled. Targeted drill depths on ATP 934 are between 2,700 to 2,900 metres with natural gas pipelines and other natural gas production infrastructure located nearby.
Bengal is excited by the natural gas resource potential in this block, as demonstrated by the activities and success in surrounding permits, as well as the transitioning Eastern Australia natural gas market. In the past, this market was effectively isolated from international markets. The ramp up of the three liquids natural gas trains in Queensland has effectively tripled gas demand from east Australia and linked the region to more robust global gas markets. The local market has now fundamentally changed as evidenced by much higher natural gas spot prices year over year, with 2017 Sydney natural gas spot prices averaging AUS$9.06 per gigajoule.
Bengal’s view of the potential for significant gas discoveries on this permit has been strongly supported by detailed geological and geophysical mapping using both 2D and 3D seismic data. Up to six individual conventional drilling prospects have been identified and mapped on the permit with additional tight gas sands potential also identified. Bengal believes that these prospects could contain gas accumulations similar to those found in gas pools adjacent to the permit.
“This acquisition supports our continuing initiative to maximize Bengal’s ownership and operatorship of its hydrocarbon prone permits in the Cooper Basin of Australia and provides additional flexibility relative to farmout or financing activity. In this regard, Bengal is currently pursuing a number of financing alternatives to fund the first of three exploratory wells designed to evaluate the resource potential of the block by the end of calendar 2018,” said Chayan Chakrabarty, Bengal’s President and CEO. “The upside to the 100% ownership of this large block, in what we believe to be a highly natural gas prone portion of the basin, is the additional leverage from successful exploratory drilling on the permit, which would be of significant value to Bengal’s shareholders.”