Melbana looking for partner to drill exploration well in Timor Sea

Australian ASX-listed oil and gas company Melbana Energy Limited is looking for a farm-out partner after disclosing maiden prospective and contingent resource estimates for a license in the Timor Sea offshore northwestern Australia.

Maiden resource estimates were completed for the undeveloped Vesta and Swan gas and oil field discoveries and adjacent prospects located within the license AC/P70 off the coast of Australia. The permit was awarded to Melbana, which is the operator and 100% holder of the license, through its wholly owned subsidiary in 2022 for an initial period of six years. 

According to the Australian player, the permit was acquired with the strategy of appraising the Vesta oil and gas discovery where “significant” additional resources are likely hosted by un-tested faulted compartments up-dip of the Vesta wells.

As disclosed by Melbana, the prospective resources associated with Vesta and Swan amount to 2,754 billion cubic feet (Bcf) and 43 million barrels of oil (MMbbl), and the contingent resources 276 Bcf and 34 MMbbls, both unrisked gross best estimates.

Since the developer feels the permit’s location near existing production and facilities is advantageous to commercialization and contributes to lower development costs, it has hired an advisor to help find a farm-out partner. The partner is expected to provide an upfront cash contribution to back costs and fund the forward technical work program, including an exploration well, which is not due until 2027. 

This follows the 500 square kilometers of the publicly available Pantheon 3D seismic survey data the firm reprocessed last year. Melbana says the interpretation indicated a larger than previously thought closure at Swan in the deeper Jurassic-aged Spec Di and Plover sections. The permit also holds the potential for large, un-tested, Triassic and Permian structural closures.

Melbana Energy’s Exploration Manager, Dr. Duncan Lockhart, said: “Our original exploration thesis for AC/P70 was to follow up on the historical oil discoveries at the Vesta and Swan fields and explore for oil. Our proprietary reprocessing of the publicly available 3D seismic resulted in a significant improvement in data quality, which allowed us to identify and map significantly larger exploration targets within and adjacent to the working petroleum systems of the greater Swan and Vesta discoveries.”

The Swan gas field was discovered by Arco in 1973 while exploring for oil and further appraised by an additional two wells by BHP in 1991. According to Melbana, the wireline pressure data from the Swan-1, Swan-2, Swan-3, and Swan-3ST1 wells and recovered gas samples from several sands of the Cretaceous Puffin sandstone confirmed a common pressure regime and the presence of mobile gas.

Vesta was discovered by Eni in 2005 with the Vesta-1 well and appraised by a second well. Three drill stem tests (DST) confirmed the presence of producible oil and gas from the Jurassic Spec Di reservoir but the field has not been developed. Significant and relatively high probability-of-geologic success (Pg) prospective resources are interpreted within un-tested compartments up-dip of the discovery wells.

As disclosed by Melbana, the identified prospective resources are contained within three greater structures. The first is Swan, where “strong” gas shows were observed in the Spec Di sands in 1980, but no testing was performed. A large closure is also said to be mapped beneath the Swan discovery in the Plover Formation. 

The second structure is Vesta. A large Spec Di closure is mapped up-dip of the Vesta discovery wells in the High Case P10 volume, while a large closure is mapped below the Vesta discovery in the interval equivalent to the Plover Formation. This was a target of the 2005 drilling program, but the depth could not be reached due to the high pressures encountered. The developer believes the improvements in drilling practices over the last two decades mean that this interval can now be safely drilled.

Vesta North is in a discrete fault compartment and volumes have been estimated for the Spec Di reservoir. However, the structure may also be prospective in the Plover Formation but volumes for this lead have not been estimated yet. 

The third structure is East Swan, which comprises two large untested plays in AC/P70 (Triassic and Permian) within one structure. These prospects are estimated to have a combined potential prospective resource of 1.8 Tcf and could be drilled with a single well.

“Some of these areas are updip of the old discovery wells, further improving the chance of success. Perhaps most notably, this work re-rates the block as being highly prospective not just for oil but for LNG-scale gas accumulations in a structure which is already proven to trap gas and oil in the shallow reservoirs and relatively close to infrastructure,” added Lockhart.

The permit contains multiple prospects and leads hosted within play fairways which the Australian player says are known to be prospective for gas and oil. The Challis, Jabiru, Skua, Puffin, and Cassini oilfields can be found nearby, while the Darwin LNG plant and export facility is located onshore approximately 690 kilometers east of the permit. 

As for Darwin LNG, Santos recently signed a non-binding memorandum of understanding (MoU) with Tamboran to conduct technical studies related to a potential expansion of the project’s Train 2 and do collaborative work on the jointly owned EP 161 acreage in the Beetaloo Basin. The partners hope to provide more gas to the country’s domestic market and international LNG scene.