Cooper and Eromanga Basins
Discovery Energy holds 100% interest in the PEL 512, a petroleum exploration license which covers 2,369 square kilometers (584,651 acres) in the Cooper/Eromanga Basin which is located in Central Australia and spans the north-eastern region of South Australia and the south-western region of Queensland.
The Cooper Basin’s most productive sediments for petrochemicals were formed during the Permian period, which ended about 250 million years ago. Since the end of this era, the Permian’s rich organic sediments have been increasingly buried under additional layers of rock, thus forming deposits of coal, oil, natural gas, and other petrochemicals.
Because of the geological history of the Australian continent, the Permian sediments in Central Australia primarily occurred in one distinct region – the Cooper Basin. This basin is surrounded by and underlies a portion of the much larger Eromanga Basin, which is mostly comprised of younger sandstones and sediments from the more recent Jurassic and Cretaceous periods.
It is these younger formations that overlie the Cooper Basin’s Permian sediments, thus trapping (or “capping”) the petrochemicals underground and creating Australia’s richest oil and gas producing region.
There have recently been many new Jurassic Eromanga discoveries being made along the southwestern oil flank of the Cooper Basin where the PEL 512 block is ideally situated
South Australia has a long history of petroleum exploration, extending back to 1866, when the first well was sunk adjacent to the Otway Basin in the search for oil. Since the first gas discovery in 1963, this area has sourced over 4 billion barrels of oil and 5 trillion cubic feet of recoverable gas. It has in excess of 120,000 kilometers of 2-D seismic data and a total of 176 gas fields and 131 oil fields have been discovered and brought online. The total number of conventional wells drilled in 2019 is 348 exploration and 949 appraisal\development wells.
By 1969, gas from the Cooper Basin was being piped to Adelaide by the Moomba central processing plant built by Santos Ltd. The Cooper Basin Liquids Project (1980–84) was initiated to market the oil and existing gas liquids. A liquids pipeline links Moomba to a processing plant and storage and export loading facilities at Port Bonython.
The Moomba plant currently accepts production from 115 gas fields and 28 oil fields containing 536 producing gas wells and 177 producing oil wells through approximately 5,600 km of pipelines and flow lines via 24 oil and gas satellite facilities. Cooper Basin gas now supplies markets in South Australia, New South Wales, Queensland and Victoria via an extensive pipeline network of approximately 3,000 oil and gas pipelines.
The Cooper and Eromanga basins are now Australia’s largest onshore petroleum province. Over the last 50 years, exploration and development activity in South Australia has focused largely on several core areas leaving much of the Basin very lightly explored.
The unconventional hydrocarbon potential of South Australian basins includes shale gas, tight gas and hydrocarbons from coal, via coal seam gas, in situ gasification and Syngas processes. In the Cooper Basin, a major effort is being focused on the unconventional shale play following 2010-11 exploration success. The first well to test shale gas potential in the Cooper Basin, Encounter 1, was completed in the Nappamerri Trough by Beach Energy with second well (Holdfast 1) also drilled, Santos has announced gas flows from coal seams, Stuart Petroleum has published resource estimates for a shale gas play in the Allunga Trough and Mettika Embayment, AGL has tested the Winton CSG play, Strike is testing the shallowest Permian coals for CSG in the southern Cooper Basin, and Santos continue to exploit tight gas.
The Company’s commitment to exploration and development in the Basin is underpinned by numerous drivers, including:
- The region is a proven oil and gas province which has been a significant provider of Australia’s energy needs since the first discovery in 1963.
- The Basin remains significantly underexplored by industry standards. Major advancements in drilling and seismic analysis have been lightly used.
- Exploration success rates in the region are very high, at over 50% following 3D seismic acquisition.
- Drilling costs are low given the basin is located onshore with easy access to equipment and infrastructure.
- Access to infrastructure is excellent, meaning the path to commercialisation for successful discoveries in both short and inexpensive.
The combination of these factors means the economic case for investing capital in exploration and development activities in the Cooper-Eromanga Basin is compelling. Based on internal estimates, the payback period on investment is calculated at under 12 months.