VIMP Report 83 - Hydrocarbon prospectivity of the 2004 Acreage Release Areas, Victoria, Australia

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Executive Summary This report is presented in four sections:

Hydrocarbon Prospectivity of Area V04-1, offshore Otway Basin, Victoria, Australia

The Otway Basin has been the focus of renewed exploration and development activity since the discovery of the commercial gas fields at Geographe and Thylacine in 2001. Since then, these exploration successes were complemented by the Casino discovery in 2002 and the search for similar hydrocarbon accumulations continues. However, compared to the Gippsland Basin, which has been Australia's premier hydrocarbon province until the turn of the millennium, the Otway hydrocarbon province still remains under-explored, especially in the offshore. Despite its over 40 years long exploration history, only 21 exploration wells have been drilled in the Victorian part of the offshore Otway Basin. It was not until 1993, following the gas discoveries at La Bella (GIIP 210 Bcf) and Minerva (GIIP 575 Bcf), that a significant hydrocarbon potential was recognised.

The release area V04-1 is located in the eastern offshore Otway Basin, adjacent to the La Bella, Geographe and Thylacine gas fields, about 200 km southwest of Melbourne. Only two wells (Triton-1 and Nautilus A-1) have been drilled in the block, but additional geological information is provided by Mussel-1 and Conan-1 as well as by basic data from Geographe-1 and Thylacine-1. Straddling the modern shelf margin in water depths between 80 and 1000 m, Area V04-1 is part of the Voluta Trough that is characterised by a thick sequence of Late Cretaceous sediments. The Tartwaup-Mussel Fault Zone along the area's northern boundary separates the Voluta Trough from the Mussel Platform. Seismic coverage over the area is very good on the Mussel Platform and limited over the deeper water portion. Three regional seismic surveys acquired by Geoscience Australia extend into the area and more seismic data has been recently acquired by Fugro Seismic Australia across the gazettal block as part of their larger Otway/Sorell 2D non-exclusive seismic survey.

Previous studies have shown that the hydrocarbon prospectivity of the Voluta Trough is exemplified by:

the presence of active petroleum systems,
the development of regional and intraformational seals,
the existence of several prospective reservoir/seal pairs, and
previously identified, as yet untested plays involving structural and stratigraphic traps.

This report presents a summary of the hydrocarbon prospectivity of Area V04-1; and also outlines the exploration history, the regional geological framework and the recognised petroleum systems elements. A total of six plays are described, based on previous discoveries and interpretation of available seismic and well data:

Waarre/Flaxman Formation Sandstone Play - This is the most productive reservoir section identified in the basin to date. The Waarre Formation is folded in a series of NE-SW trending structures which are cut by NW-SE faults that have provided footwall closures. The thick Belfast Mudstone provides an effective seal and the principal risk lies with the reservoir quality, which is known to be variable between the Mussel Platform and the Voluta Trough.

Turonian-Santonian Slope Fan Play - Within folded/faulted anticlines, slope-fan deposits above the Waarre Formation have been identified on seismic data in South Australian State waters and provide an alternative target to the Waarre/Flaxman sandstones because they may exhibit better reservoir properties. The reservoir intervals are sealed by the laterally extensive and thick Belfast Mudstone.

Intra-Paaratte Formation Play - Within tilted fault blocks that contain intra-Paaratte Formation sandstones, trap-seal is provided by intraformational shales. This play is developed in either hanging walls or footwalls and the principal risk relates to the lateral extent and quality of sandstone reservoirs as well as to fault-seal integrity.

Top Paaratte Formation Play - Top Paaratte Formation traps are dependent on the development of a competent top-seal above the Maastrichtian unconformity. Potential sealing units include the basal K/T-shale (Massacre Shale), Pember Mudstone and the basal mudstones of the Dilwyn Formation. The main play risks are considered to be the presence of coarse grained lithologies in this distal location.

Nirranda Group Stratigraphic Play - This is a lowstand systems tract play, developed on the outer shelf, involving basin-floor and slope fans. Underlying lower Sherbrook Group source rocks in the Voluta Trough range from being mature for oil generation to being gas generative and may have the capacity to generate and migrate significant quantities of oil vertically via faults into the Tertiary section.

Oligocene Lowstand Fans Stratigraphic Play - Seismic data indicates that an extensive system of lowstand fans are developed beneath the present day shelf edge. These fans may include excellent reservoir intervals and, provided they received a hydrocarbon charge, may be developed as stacked reservoir/seal successions.

The Otway Basin is well positioned to contribute to the SE-Australian energy market. Supported by recent market deregulation, it has become easy to produce and sell newly discovered hydrocarbons. Victoria hosts the largest gas market in eastern Australia with a well-established pipeline network linking major population centres in Victoria, South Australia, New South Wales and Tasmania. The recent gas discoveries in acreage adjacent to V04-1 provide encouragement for future exploration programs, especially with the outlook of already approved development of the new offshore fields.

Hydrocarbon Prospectivity of Area V04-2, offshore Torquay Sub-basin, Victoria, Australia

The Commonwealth of Australia and the State of Victoria Joint Authority is inviting applications for an exploration area in the offshore section of the Torquay Sub-basin. Area V04-2 comprises 80 graticular blocks covering an area of 4630 km². Water depths are shallow, with a maximum depth of approximately 90 m.

The Torquay Sub-basin is part of the eastern Otway Basin and situated in southeastern Australia, located approximately 100 km southwest of Melbourne. The area is well serviced by excellent road and rail access as well as being proximal to onshore interstate gas pipelines, major petroleum refineries and expanding gas markets. The Sub-basin covers an area of approximately 4480 km² of which some 90% lies offshore, delineated by the Otway Ranges/Bambra Fault to the northwest and west, the Selwyn Fault/King Island-Mornington High to the southeast and east, and by shallow basement elsewhere. Seismic interpretation suggests around 6-7 km of Cretaceous-Tertiary sediments have been deposited.

The stratigraphy of the Sub-basin reflects two phases of tectonic development: Late Jurassic to Early Cretaceous rift to regional sag sequence which has affinities with the main Otway Basin, and mid-Cretaceous to Recent rift to passive margin sequence which is more analogous to the intracratonic Bass Basin further east.

The Otway Basin is regarded as immature in terms of exploration, however recent gas discoveries at Geographe, Thylacine and Casino have significantly upgraded its hydrocarbon potential. In contrast, only three petroleum exploration wells have been drilled in the gazettal block (Nerita-1, 1967; Snail-1, 1972; Wild Dog-1, 1992/3), placing the offshore Torquay Sub-basin into a more frontier context. Despite having excellent reservoir and seal characteristics, none of these wells discovered commercial hydrocarbons. There was an emphasis on Tertiary targets in all three wells, and, as the Cretaceous Otway Group section has yet to be fully penetrated in the Sub-basin, we believe the source rock and hydrocarbon generation potential, as well as the reservoir and trapping potential, is not adequately understood.

The Mesozoic petroleum system can be regarded as being analogous to the hydrocarbon-bearing Otway and Bass basins. The Torquay Sub-basin has all the elements for successful hydrocarbon entrapment; supported by the identification of a possible DHI in an Oligocene structure on the Snail Terrace (the Wilkinson Lead). In addition, thermogenic gas has been detected from seabed seepages in several parts of the Sub-basin, and gas and oil shows were recorded in Nerita-1 and the onshore Anglesea-1A wells.

Demand for gas in southeastern Australia is predicted to grow steadily over the next 15 years, and recent changes to the economic and regulatory environment has resulted in Victoria undergoing a resurgence in exploration and production activity. Several new gas developments are currently underway at Patricia-Baleen and Bream in the Gippsland Basin, and at Geographe-Thylacine and Minerva in the Otway Basin. Development of these fields will enhance security of supply and competition in the energy market of both South Australia and Victoria. Interstate gas pipelines now connect Victoria to Sydney in New South Wales, Adelaide in South Australia, and Tasmania. The latest exploration gazettal rounds have also resulted in considerable interest from both large and small petroleum industry players.

Prospective leads within the gazettal block have been delineated in both the Tertiary Boonah Formation and the Cretaceous Pretty Hill Formation. Additional potential targets include fractured basement that has proved hydrocarbon-bearing in the western Otway Basin.

Hydrocarbon Prospectivity of the State Waters Block 04-1(v), offshore Otway Basin, Victoria, Australia

The Victorian Government is inviting applications for 04-1(v), a State Coastal Waters exploration area in the Otway Basin. The block covers an area of 260 km² and is located approximately 350 kilometres WSW of Melbourne (population 3,370,000). The port city of Portland (population 9,600) is located 20 km to the east.

Applications for this block close Thursday, 30th September 2004.

Geologically, the gazettal block is underlain by a NW-SE striking Late Jurassic - Early Cretaceous rift system overprinted by the NW-SE striking Late Cretaceous - Early Tertiary Portland Trough. No wells have so far been drilled in the block, however four offshore and numerous onshore wells have been drilled nearby. In addition many stratigraphic and water bores, many exceeding 1200 m in depth, have been drilled by the Victorian Government onshore immediately north of the block.

Although no commercial accumulations of hydrocarbons have yet been found in the area, numerous oil and gas shows have been observed, the most significant being Lindon-1, which intersected a 3 m oil column in the Early Paleocene Pebble Point Formation. Lack of exploration success in the area is partially attributed to poor seismic control, with many onshore wells located on poor quality seismic data. Offshore, until the recent Essential Petroleum VIC/P46 survey, the pre-existing Phillips OP80 survey provided a coarse 2 km x 5 km grid of seismic data on which Normanby-1, Bridgewater Bay-1 and Discovery Bay-1 were based.

Hydrocarbons sourced from basins along the southern margin of Australia have been assigned to the Austral Petroleum Supersystem. Within this supersystem, three petroleum sub-systems related to the Otway Basin have been recognised as follows:

Austral l – Late Jurassic to earliest Cretaceous fluvio-lacustrine shales.
Austral 2 – Early Cretaceous fluvial and coaly facies.
Austral 3 – Late Cretaceous to earliest Palaeogene fluvio-deltaic facies.

Play fairways in the gazettal area include:

Sandstones of the Eumeralla Formation and Crayfish subgroups, sealed intraformationally in tilted fault-blocks.
Waarre/Flaxman Formation sandstones, sealed by Belfast mudstones in tilted fault-blocks.
Paaratte Formation sandstones, sealed by intraformational shales of the Belfast Mudstone in tilted fault-blocks.
Pebble Point Formation and Timboon sandstones, sealed by Pember mudstones in tilted fault-blocks, drape features or palaeogeomorphic traps.

The distribution of these play fairways in the vicinity of 04-1(v) is largely controlled by the thickness of the Late Cretaceous - Tertiary section across the Tartwaup-Mussel Fault System. The main play fairway includes the Late Cretaceous Waarre Formation, base-Tertiary Pebble Point Formation and Late Cretaceous Timboon and Paaratte formations. The Waarre Formation possibly has the best reservoir potential and is already a proven reservoir in the Port Campbell area. The underlying Otway Group play fairways (i.e. the Casterton Formation, Pretty Hill Formation, Katnook Sandstone, Windermere Sandstone Member and Heathfield Sandstone), on the other hand, are probably too deep to be viable reservoirs. Charge for the Waarre and Pebble Point Formation plays would most likely be from the Eumeralla Formation, which in the Portland Trough, is overlain by 3000 - 3500 m of Late Cretaceous - Tertiary sediments; the optimum burial thickness for Tertiary hydrocarbon generation.

Leads have been proposed along the northern flank of the Normanby High where potential exists for closures in Cretaceous and Early Tertiary fault bounded structures; however, the current seismic coverage is inadequate to map these in detail. This potential is enhanced by access to the Victorian and South Australian gas markets through the close proximity of the area to the recently commissioned SEA Gas Pipeline.

Hydrocarbon Prospectivity of Areas VIC/M-04(1), VIC/M-04(2) and VIC/M-04(3), Murray Basin, Victoria, Australia

The Murray Basin, the largest sedimentary basin in SE-Australia, is well known for its rich mineral sands deposits, while hydrocarbon exploration in the Murray Basin has been very limited. Over the last ten years, sparse seismic data and the drilling of some deeper wells have contributed to the understanding of the basin's subsurface geology. More insights have recently been provided by newly acquired and interpreted potential field data. However, with respect to the basin's hydrocarbon potential, too little data is available for a detailed assessment.

The Murray Basin is filled with up to approximately 600 m of Cainozoic sediments which accumulated under dominantly marine and partly terrestrial conditions. The three gazettal blocks are located in parts of the basin that are underlain by older, Mesozoic and Palaeozoic infra-basins, such as the Wentworth Trough (VIC/M-04(1)) and the Numurkah Trough (VIC/M-04(2) and VIC/M-04(3)). The available data suggest that the infra-basins may contain lithologies that are suitable as sources, especially in the Permian section that could include coal-bearing sediments. A variety of parameters exert a negative influence on the hydrocarbon prospectivity of the basin. Most importantly, the burial depth of potential source rocks is not great enough for hydrocarbon generation, leaving these sediments at thermally immature levels. In addition, the Tertiary is only slightly faulted, resulting in a lack of appropriate structural traps. Any serious attempt at hydrocarbon exploration in these areas would need to acquire new seismic data and focus on the pre-Tertiary sedimentary section within the older infra-basins. Depending on their burial history, parts of these may have been exposed to high enough temperatures for source rock maturation.

Bibliographic reference Bernecker, T., Driscoll, J., Powell, A. and Thomas, J.H., 2004. Hydrocarbon prospectivity of the 2004 Acreage Release Areas, Victoria, Australia. Victorian Initiative for Minerals and Petroleum Report 83. Department of Primary Industries.