ATP 855

Location
ATP 855 is located in the Cooper-Eromanga Basin on the eastern side of the Queensland and South Australian border. PRL's 33-49 are adjacent to ATP 855 on the western side of the border and both permits share part of the Nappamerri Trough. The Nappamerri Trough is one of the most advanced shale and basin centred gas provinces in Australia. The Moomba to Ballera Gas Pipeline traverses the block and the area is surrounded by existing oil and gas production units. ATP 855 occupies a total area of 1,679km².

Interest Held
Icon Energy - 100%

Prospect Type
Conventional and unconventional oil and gas.

Update on ATP 855
On 31 March 2017, Icon Energy, announced that it has assumed a 100% working interest and operatorship in ATP 855 following the withdrawal of Beach Energy from the tenement.

During Stage 1, the Joint Venture drilled six wells, had petroleum discoveries in all six wells, achieved the highest gas flow rate of 4.5MMscf/d from a shale gas well (Halifax-1) in the Cooper Basin and identified a significant natural gas resource within the Permian Formations of the Nappamerri Trough. In the five wells that flowed gas to surface, the flow tests were designed to evaluate the performance over specific zones in the wells and several horizons remain untested in some of these wells.  

Following the drilling, stimulation and testing of the wells in ATP 855, the resultant data was fully evaluated in preparation for the planning of the Stage 2 exploration program. Icon will now work on preparing for this next stage of activity over the coming year, which will become a focus area for the Company.

The Gross Contingent Resource for ATP 855, initially reported by Icon on 27 March 2015 and outlined in detail in the Icon Energy Annual Report 2015, currently remains unchanged. DeGolyer and MacNaughton (D&M), a well-respected and qualified international petroleum reserve and resource evaluation company, were engaged by Beach Energy (Operator) to undertake an update and provide a report on the Contingent Resources estimated in ATP 855. This report was an update of the report on Contingent Resources estimated in the areas around the Halifax-1 well prepared by DeGolyer and MacNaughton in 2013, results of which were announced by Icon Energy on 26 August 2013.

The report prepared by the consultants estimated Contingent Resources as at 31 December 2014 to be as follows:

    Gross Contingent Resources1
1C (Bcf)          2C (Bcf)          3C (Bcf)

‚Äč  343                 1,572               5,841

The Contingent Resource estimate was evaluated in accordance with the Petroleum Resources Management System (PRMS) (March 2007).

D&M evaluated the well results from Halifax-1, Etty-1, Hervey-1, Redland-1 and Geoffrey-1. D&M utilised core, log and flow test data from the target intervals in these wells to determine whether a significant quantity of potentially moveable hydrocarbons had been encountered. This is a key requirement for a discovery under PRMS. The results of this work showed that the flow rates from all of these wells passed the discovery test.

Gas In Place was estimated using the volumetric method and applying a statistical distribution to the parameters including recovery factor. These probabilistic estimates have been made for each target formation and these have been statistically aggregated. The key contingencies include the need for longer flow tests to confirm expected ultimate recovery with certainty, optimization of future well costs, Gas Sales Agreements and connection to production facilities.

The size of the area chosen for the assignment of Contingent Resources was based on guidance from PRMS, which indicates that a low estimate (1C) of area should consist of two to three well spacings surrounding the discovery well, a best estimate (2C) of area should be two to three well spacings beyond this, and a high estimate (3C) of area should be another two to three well spacings beyond this. Well spacings vary between 80 acres and 160 acres dependent on the well type applied to address the particular resource. As a result, the 2C resources were estimated over an area of between 6,500 acres and 13,000 acres around each of the five wells tested, depending on the particular formation. The total area of the ATP 855 permit is approximately 414,000 acres.

In an ASX release on 29 August 2016 Beach Energy indicated that they had reduced contingent resources associated with the Nappamerri Trough to nil reflecting their opinion that the project is unlikely to be developed commercially in the medium term.

Notes
1 Contingent Resources are those quantities of wet gas (produced gas minus carbon dioxide) that are potentially recoverable from known accumulations but which are not considered to be commercially recoverable due to the need for additional delineation drilling, further validation of deliverability and original hydrocarbon in place (OHIP), and confirmation of prices and development costs. This is based on a statistical aggregation method using Monte Carlo simulation estimates for each formation.
 

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