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  • IPB Petroleum Extends Browse Basin Acreage 0 comments
    May 19, 2013 10:12 PM

    IPB Petroleum (ASX: IPB) has been awarded a third Browse Basin petroleum exploration permit that is believed to host an extension of an oil play identified in one of its existing permits.

    WA-485-P (IPB 100%) lies immediately north of WA-424-P (IPB 75%) and immediately east of WA-417-P (IPB 100%), bringing its total position up to 14,000 square kilometres.

    Analysis and interpretation of existing available 2D seismic data has led the company to conclude the WA-485-P contains a substantial continuation of the M.australis horizon oil play identified in WA-424-P.

    This is estimated to host 322 million barrels of mean prospective recoverable oil resource in WA-424-P alone and will be tested by the upcoming Pryderi-1 exploration well that is expected to spud in mid-July.

    A success at Pryderi will add to the prospectivity and value of WA-485-P as well as WA-471-P.

    "The granting of WA-485-P is an important next milestone in the continuing development of IPB Petroleum," managing director Brendan Brown said.

    "Our company is excited about the oil potential of the near shore margin of the Browse Basin and we're on track to begin drilling the planned Pryderi-1 well in the 3rd quarter in our neighbouring WA-424-P permit."

    The company has commenced a more detailed resource estimation for WA-485-P and expects that it will be able to provide this information to the market on or before mid-June 2013.


    IPB noted that water depths in WA-485-P are relatively shallow at about 100 metres.

    This together with the shallow interpreted reservoir depths of about 700 metres has allowed the company to bid two exploration wells as part of the permit work program for the equivalent cost of less than one exploration well in deeper parts of the Browse Basin.

    Besides the two wells in third year of the first primary three year term, the company has also committed to carrying out:

    - Year One: $250,000 worth of geophysical and geological studies;
    - Year Two: 610 square kilometres of 3D seismic worth $7.5 million and another $250,000 of studies; and
    - A further $250,000 worth of geophysical and geological studies after drilling the wells, which are estimated to cost about $24 million.

    IPB has also penned in a $19.75 million work program for the second three year term though this can be entered into at the company's option at the end of the first term.


    The well in WA-424-P is expected to spud by mid-July, targeting a high-amplitude seismic response similar to that seen at the non-commercial Gwydion-1 oil discovery that was made by BHP Billiton (ASX: BHP) in 1995.

    ISIS Petroleum Consultants estimates that there is a 75% chance of a hydrocarbon discovery at the Pryderi prospect.

    Quantitative seismic interpretation work on the 3D seismic concluded that in the event of a discovery, there is a 60% probability that the hydrocarbon phase would be oil, giving an overall 45% chance of an oil discovery with a mean recoverable prospective resource of 40 million barrels.

    Notably for IPB, the well is fully funded by farm-in partner CalEnergy, a fully-owned subsidiary of Berkshire Hathaway's MidAmerican Energy Holdings Company.

    IPB's permits are located in one of the most prospective oil and gas basins in Australia. The last two years have seen in excess of A$40 billion of gas condensate development projects reaching final investment decision approval in the Browse Basin.

    Notable fields located nearby are the Prelude gas field (2 trillion to 3 trillion cubic feet), where Shell (LON:RDSA) is developing the world's first floating liquefied natural gas project, and Inpex Corporation's giant Ichthys gas field (12.8Tcf) that will feed its 8.4 million tonne per annum LNG facility in Darwin.

    The permits are also close to the undeveloped Cornea oil field.


    With the expected spud date for the Pryderi WA-424-P well in July, interest will return to IPB given the farm-in partner CalEnergy's pedigree as well as the risked probability of finding oil.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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