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NEW SOUTH WALES
PEL 285 – Gloucester Basin NSW (30% interest)
PEL 285 covers an area of approximately 1,050km2 on the central coast region of New South Wales, approximately 100km north of Newcastle. The Gloucester Basin, which occupies an area of about 600km2, contains approximately 210km2 of Permian Coal Measures, which are highly prospective for CBM.Molopo’s activities this year were concentrated on completing the Phase II Gloucester Basin appraisal programme focused on the Stratford CBM Prospect and commencement of planning for future development and commercialisation with:
• pilot production testing to demonstrating the potential for commercial gas production within the Stratford Prospect;
• expansion of the initial Stratford Pilot from one to six production wells;
• completion of an expanded Phase II appraisal programme; • continued evaluation of short term alternatives to commercialising the Gloucester Basin permit through the initial development of the Stratford Pilot. The Stratford CBM Prospect has a GIP estimate of 90 PJ within a 5km2 area, while the coal bearing sequence in the Gloucester Basin is approximately 210km2. It contains around eleven coal seams thicker than 2.5m with an average net coal thickness of around 40m, at depths of 200m to 700m. Measured average gas contents range from 12 m3 /t to 20 m3/t dry ash-free (“daf”), with methane contents of 95-99%. Measured coal seam permeability is also high, ranging from around 1mD to greater than 300mD at depths of 100m to 700m, with an average permeability at around 10mD to 20mD.
With very favorable coal and gas characteristics, and the area’s strategic location in proximity to the high gas price market in Newcastle, the Stratford Prospect is a core project in the Molopo petroleum portfolio, and positive results have the ability to add significant value to the Company.
A milestone was achieved in February with the receipt of initial reserves certification for the project based on an estimated GIP of 1,600 Bscf.
Molopo has a 30% net equity share.
Figure F Gloucester Basin
Reserve Type
Volume (Bscf)
1P or Proved Volumes
During the year production testing in the Stratford Pilot expanded from the initial promising production evaluation well, Lucas Molopo Gloucester 03 (LMG03), which during testing recorded an interim peak of 1,050,000 scf/d to this year include five additional test wells, Stratford 4, Stratford 5, Stratford 6, Stratford 8 and Stratford 9. At the time of writing three of these wells had also demonstrated interim production peaks in excess of 1,000,000 scf/d from coal seams at depths greater than 500m. Stratford 5 and Stratford 6 were dewatering with initial gas production rates climbing and Stratford 9 was awaiting pump installation after hydraulic fracture stimulation.
Drilling continued on the part-cored and chip CBM exploration holes, planned as part of the thirteen hole expanded Phase II Gloucester Basin appraisal programme. The expanded Phase II Gloucester Basin appraisal programme is designed to establish reserves across the Gloucester Basin and to ascertain production capabilities prior to a development decision.
Activity was focused on the assessment of the deeper northwestern parts of the Gloucester Basin, with the drilling of part-cored hole, Craven 3A to 883m and commencement of Faulkland 1A a redrill of the Faulkland 1 hole. Craven 3A was terminated early due to deteriorating drilling and hole conditions. The hole confirmed the presence of coals in the upper portion of the Gloucester Coal Measures, albeit thin and poorly developed. At the time of writing chip hole Faulkland 1A was drilled and surface cased to 161m, drilling will continue pending availability of a larger rig.
Two exploration holes were also drilled in the southern portion of the Gloucester Basin. Weismantel-3 was drilled to 796m (encountering 16m of net coal) and cased for future completion as a potentially standalone pilot test well of the Weismantel and Clareval coals. Cored hole Weismantel 2 was drilled to 668m and also encountered 16m of net coal in these seams. The hole was logged and a piezometer will be installed to monitor these seams when production testing commences in Weismantel 03.
A production licence application and development plan approval process has commenced with the New South Wales Government. Major Project Status has been granted to the project and, subject to the approvals process and progress with gas contract discussions, it is expected that initial gas sales from the project will commence in late 2010. A pipeline export route to Newcastle is being sought to ensure this timeframe can be met.
CLARENCE MORETON BASIN – NSW
PEL 13 - Clarence-Moreton Basin, NSW (reducing to 25% in CBM and 50% in conventional,)
The licence covers an area of 1,200km2. The area is prospective for CBM and conventional gas. Twenty one conventional wells have been drilled to date in the basin with several wells flowing gas. Earlier exploration has identified a number of structures, which remain untested.Molopo, with partner and Operator Metgasco, have focused activities on reprocessing and interpretation of
pre-existing seismic and acquisition of new 2D seismic to assess the CBM potential of the Walloon Coal Measures and conventional gas targets.During the year Metgasco fulfilled its obligations, pursuant to the Second CBM Farmin Programme Agreement, by undertaking a mutually agreed work programme which included completion of reprocessing and interpretation of 255 line km in twenty three pre-existing seismic lines. The quality of the reprocessed data was a marked improvement on the original processed data.
As part of its obligations pursuant to the Third Farmin Programme and the conventional gas interests, Metgasco completed a new 2D vibroseis seismic acquisition programme. The final acquisition comprised six lines and a total of 48 line km. Work has commenced on the data processing and interpretation.
A well completion report for CBM exploration hole Metgasco Molopo Middle Creek 1\1A drilled in 2007 was finalised. Poorer coal development than anticipated and low coal permeability was encountered in the target Walloon Coal Measures. The newly acquired 2D seismic has been designed to evaluate the shallow up dip potential of the Walloon Coal Measures and structures which could enhance coal seam permeability
Figure G Stratford Prospect
Figure H Clarence Moreton Basin
PEL 426 – Clarence Moreton Basin, NSW (50% interest)
The licence now covers an area of approximately 3,450km2 in the southern Clarence Moreton Basin. The area has been sparsely tested for CBM gas and conventional hydrocarbon accumulations. Several potential prospects and leads have been identified for testing.Molopo received New South Wales Department of Primary Industry approval to continue work in PEL 426 over the last two years of the current four year term, following a satisfactory presentation of work completed in the permit in the first two years of this term.
Metgasco continued it’s farmin activities into Molopo’s interests. As part of its First Farmin Programme obligations Metgasco completed the reprocessing and interpretation of 215 line km in twenty four pre-existing seismic lines over the Pine Brush and Clifden Prospects.
Metgasco also completed a new 2D vibroseis seismic acquisition programme. The final acquisition comprised
ten lines and a total of 85 line km. Work commenced on the data processing and interpretation to identify a drillable target for a dual CBM/conventional gas well. In funding these agreed programme obligations Metgasco earned a 50% working interest in the CBM and conventional rights in PEL 426.
