VIMP Report 61 - Petroleum systems, play fairways and prospectivity of the Gazettal Area V99-2, offshore southern Gippsland Basin, Victoria

Category: Victorian Initiative for Minerals and Petroleum Reports	Product Code: MP-R-34482
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Executive Summary The offshore Gippsland Basin is Australia's premier petroleum province with reserves exceeding four billion barrels of crude oil and condensate and 10 TCF of natural gas. Its production meets 40% of Australia's crude oil needs and most of Victoria's gas requirements. It is located approximately 200 km from Melbourne and is well serviced by roads and population centres. A network of pipelines brings produced hydrocarbons onshore to petroleum processing facilities located at Longford.

Recent gazettal rounds in the Gippsland Basin have resulted in a number of new acreage awards outside the Esso/BHPP joint venture production licences. The increased interest has been from a variety of companies, spanning both large and small oil industry players and may be attributed to a number of factors ranging from improvements in technology to the changing economic and regulatory environment. The main factors in the changing business setting of this prolific basin are as follows:

Its location in close proximity to a stable, diversified and growing economy.
Existing infrastructure: with declining production there is an increased potential for third party production into under-capacity facilities. The impact on development capex and minimum pool sizes can be dramatic.
Deregulation and reform of the upstream and downstream gas industry and increasing access to new interstate gas markets.
An increasingly strong government priority to increase competition in the region.
A competitive national fiscal regime.

Some areas of the basin, including Area V99-2, have not received appropriate attention in recent years. This hiatus of activity offers opportunities for significant improvements in:

seismic data quality, through the application of up-to-date reprocessing and acquisition technology
the application of state-of-the-art interpretative concepts, and
the application of new engineering technology.

Area V99-2 represents a significant proportion of the currently vacant prospective shallow water acreage in the basin. It has been assessed to offer considerable low risk potential for both oil and gas. This report presents an interpretation of the block and identifies two proven play types with nearby follow-up prospects and leads.

Area V99-2 has seven abandoned wells, drilled between 1972 and 1990. Three of these discovered oil and gas/condensate accumulations in basal Latrobe Siliciclastics and Golden Beach Subgroup sandstones. The previous permit holder interpreted these as sub-economic. The Anemone-1A discovery is estimated to have proved and probable GIP of 11 BCF plus 0.6 MMB of condensate, while the nearby Archer-1 well has 7.6 MMB of oil-in-place plus 66.9 BCF of GIP. These fields have numerous well-defined pay zones, with hydrocarbons defined from RFT data. No follow-up drilling was conducted on these and all dry wells in the area are considered to be outside valid closures.

At least 14 structural closures are mapped as prospects and leads in V99-2. Most of these are downside fault rollover features of the type successfully tested by Anemone-1A and Archer-1. The trapping of hydrocarbons at these two wells confirms that oil and gas has been generated and migrated, and that fault-plane sealing works effectively.

The highest potential and lowest risk prospect is Anemone Southeast, located within 5 km. of the Archer/Anemone discoveries. The prospect has over 500m of thickly interbedded marine shales and sandstones in a four-way dip, fault independent, closure. Fault independent closure is approximately 50m at the top Golden Beach Subgroup level. Reservoir quality (up to 18% average porosity) and thickness (up to 30m) are optimal in this lower Latrobe/upper Golden Beach target zone. Conservative reserve estimates are 32 MMB and 53 BCF of gas in the lower zones. With current technology the Archer/Anemone/Anemone Southeast area could be developed together. Total developable reserves are potentially 35.5 MMB oil and 117 BCF of gas.

The same fairway extends to the north at least as far as the Helios-1 well, below which there is clear seismic evidence that this play persists. Here, the Deep Helios lead is a downside fault anticline with targets developed in the lower Latrobe Siliciclastics and Golden Beach Subgroup. Seismic and stratigraphic evidence suggests that good quality marine shales and shoreface sandstones are present in the interval, similar to those seen in Anemone-1A.

The Archaeopteryx Prospect is the largest structural play in V99-2. It is a four-way dip (fault independent) closure mapped at several intra-Latrobe horizons and at the top of the Golden Beach Subgroup. This play is estimated to contain up to 117 MMB of recoverable oil.

In summary, Area V99-2 provides a unique investment opportunity that fits both a conservative ‘industry downturn’ (low risk with existing infrastructure) and a ‘more aggressive’ exploration and development strategy. The opportunity is available to explore for and develop both oil and gas in close proximity to infrastructure and to be optimally positioned to participate in the supply of gas to the southeastern Australian market.

Bibliographic reference Smith, M.A., 1999. Petroleum Systems, Play Fairways and Prospectivity of the Gazettal Area V99-2, Offshore Southern Gippsland Basin, Victoria. Victorian Initiative for Minerals and Petroleum Report 61. Department of Natural Resources and Environment.