• Independent Certification of West Erregulla Reserves by NSAI supports ability to satisfy Warrego’s foundation Gas Sale Agreement
• Kingia reservoir certified 2P Reserves (proved plus probable) of 300 PJ of gas (gross) with 3P upside of 372 PJ (gross)
• West Erregulla 2C Contingent Resources certified at 128 PJ of gas (gross) with a further 198 PJ (gross) of 2U Prospective Resources
• West Erregulla Reserves certification by NSAI in line with previous Resources certification
• Excellent exploration potential in EP469 to the east and north of West Erregulla
Warrego Energy Limited announces details of the independent certification of Reserves for the West Erregulla gas field located in EP469, onshore in the northern Perth Basin, Western Australia.
West Erregulla Reserves and Resources have been independently certified by Netherland, Sewell & Associates, Inc (“NSAI”) in accordance with SPE-PRMS guidelines (2018). Reserves were assessed solely from the Kingia reservoir while the Kingia and other formations were evaluated for the purposes of determining Contingent and Prospective Resources.
Warrego Energy’s Group CEO, Dennis Donald, said:
“The independent Reserves certification by NSAI strongly correlates with the initial Resources certification that RISC Advisory completed for Warrego in May 20201 which further enhances our confidence in the production potential of the asset. Confirmed gross 2P Reserves of 300 PJ, and potentially 3P upside of 372 PJ, supports Warrego’s ability to satisfy its foundation Gas Sale Agreement.
“A further 128 PJ of gross 2C Contingent Resources and 198 PJ of 2U Prospective Resources were assigned to West Erregulla which gives us the incentive to pursue the full upside potential of this asset, starting with the re-testing of WE-5 and the re-entry of WE-3.
“Beyond that, we are very excited about the exploration potential in EP469 to the east and north of the EP469 permit. The 3D seismic survey planned for the first half of next year will give us a more detailed view of some highly prospective leads. These near-field structures, should they yield discoveries similar to West Erregulla and Lockyer Deep, could form the basis for the next phase of development in EP469.”
Reserves are those quantities of petroleum anticipated to be commercially recoverable from known accumulations by application of development projects from a given date forward under defined conditions. Reserves must be discovered, recoverable, commercial, and remaining as of the evaluation date based on the planned development projects to be applied. Proved Reserves are those quantities of oil and gas which, by analysis of engineering and geoscience data, can be estimated with reasonable certainty to be commercially recoverable; probable and possible Reserves are those additional Reserves which are sequentially less certain to be recovered than proved Reserves. The energy content of the gas Reserves is 1.081 PJ per Bcf. In place volumes are reported at surface conditions. The 1P Reserves in Table 1 are inclusive of proved developed non-producing and proved undeveloped Reserves. There are no proved developed producing Reserves at this point in time.
Contingent Resources are those quantities of petroleum estimated as of a given date to be potentially recoverable from known accumulations by the application of development projects not currently considered to be commercial owing to one or more contingencies. The Contingent Resources shown in this announcement are contingent upon acquisition of additional technical data that demonstrate producing rates and volumes sufficient to sustain economic viability, and commitment to develop the resources. If these contingencies are successfully addressed, some portion of the Contingent Resources may be reclassified as Reserves. Based on analogous field developments it appears that the best estimate Contingent Resources in Table 2 have a reasonable chance of being economically viable.
Prospective Resources are those quantities of petroleum which are estimated as of a given date to be potentially recoverable from undiscovered accumulations by the application of future development projects. The Prospective Resources shown in this announcement should not be construed as Reserves or Contingent Resources; they represent exploration opportunities and quantify the development potential in the event a petroleum discovery is made. Based on analogous field developments it appears that the unrisked best estimate Prospective Resources in Table 3 have a reasonable chance of being economically viable.
Basis of Preparation Summary
The West Erregulla Field is an elongated north-south dip closed anticline structure, approximately 10 km long by 4 km wide with a structural relief in the order of 100m. The main conventional reservoirs are Early Permian age Kingia and High Cliff sandstones which display good reservoir parameters and are the principal producing reservoirs at the Waitsia Field and Kingia discovery at Beharra Springs Deep. At West Erregulla, the Kingia is separated from the High Cliff by the Bit Basher shale.
At the Kingia and High Cliff levels, the West Erregulla Field is divided into the northern and central areas which are believed to be in communication. West Erregulla Field is generally dip-bounded to the east, fault-bounded to the west, and separated to the south by a saddle.
Secondary discovered gas pools include the shallower Late Permian Dongara and Wagina sandstones. Additional well control and technical information is needed to identify the most likely productive intervals in these sandstones and they therefore have been classified as prospective resources.
Four appraisal wells have been drilled on West Erregulla Field with WE-2 and WE-4 tested and completed for production. Water was encountered at WE-4 at a depth of -4,630m TVDSS. The Operator interpreted this water as a possible perched water zone and drilled the WE-5 well with the intention of testing the interval below this depth. An ineffective completion contributed to a production barrier that was unable to be overcome which led to compromised flow rates and uncertainty in the well test results to date, specifically where the observed flows originated. WE-5 is yet to be re-tested and WE-3, currently suspended, will be re-entered before drilling on to the target formations and subsequent testing. Both WE-5 and WE-3 are intended to be completed for production. For the purposes of this Reserves certification, the 1P cut-off was interpreted at -4,630m TVDSS. The cut-off for 2P and 3P was interpreted between -4,630m TVDSS and -4,650m TVDSS depending on the location across the field.
The Reserves and Resources information in this announcement are derived from the report produced for the EP469 JV by NSAI as at 31 August 2021. The Reserves and Resources assessment was prepared in accordance with the definitions and guidelines set forth in the 2018 Petroleum Resources Management System (PRMS) approved by the Society of Petroleum Engineers (SPE). As presented in the 2018 PRMS, petroleum accumulations can be classified, in decreasing order of likelihood of commerciality, as Reserves, Contingent Resources, or Prospective Resources. Different classifications of petroleum accumulations have varying degrees of technical and commercial risk.
The Reserves, Contingent Resources, and Prospective Resources shown here have been derived using probabilistic and deterministic methods. Production forecasts are based on well test analysis.
Recoverable volumes per well are based on applying recovery factors to estimates of OGIP. Estimates of OGIP are based on geological mapping of gross volumes in-place or areas, and applying probabilistic analysis to other geological, petrophysical, and engineering parameters. Ranges of expected net-togross or net thickness, porosity, water saturation, and formation volume factor were defined based on well log, test, and sample data. Estimates of recovery factors are based on performance data, planned abandonment conditions, and analogy to fields and reservoirs with similar characteristics.
