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Baraka Energy and Resources closer to flow testing of Southern Georgina Basin wells

Published: 12:00 21 Sep 2012 AEST

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Baraka Energy and Resources (ASX: BKP) is closer to unlocking the potential of its Southern Georgina Basin shale play with partner PetroFrontier (CVE: PFC) preparing to stimulate the Baldwin 2Hst1 well.

Once the 10 stage stimulation program at the Baldwin well is completed, the completion crew will move on to stimulate the Owen-3H well.

Flow testing will start in reverse order ending with the MacIntyre-2H well in EP 127 (Baraka 25%) once all stimulation operations are completed.

Results from the wells are expected before the end of the year prior to the start of the wet season in the Northern Territory.

The three wells are located in the Southern Georgina Basin, which has been assessed to host high quality source beds and potential conventional and unconventional reservoir rocks.

These include the organic-rich Cambrian Arthur Creek black marine shales that are similar to the source rocks in extremely productive fields of East Siberia, Oman and the Tarim Basin in China.

These shales range in maturity from dry gas to oil and are thought to be analogues to the prolific Bakken shale that stretches across Montana and North Dakota.

In a further show of the prospectivity of the Southern Georgina Basin, PetroFrontier has also closed the second tranche of its C$10 million private placement oversubscribed and will use proceeds to fund the remainder of its 2012 capital expenditure program with Baraka and Norwegian state oil company Statoil.

Industry interest

The news comes as Santos (ASX: STO) Asia Pacific vice president Martyn Eames told the South East Asia Australia Offshore Conference in Darwin this week that the Northern Territory Government estimates that more than 200 trillion cubic feet of shale gas resources could be present within its borders.

“This presents not only another major supply source for export of domestic gas but promises to deliver significant employment opportunities as well as royalties and taxes,” he said.

Atle Rettedal, the senior vice president of new ventures of Statoil, which is farming into PetroFrontier’s Southern Georgina Basin assets – including EP 127 and EP 128 where Baraka has a 25% interest – added at the conference that the exploration in the Basin was still in its early days and that Statoil was very excited about its prospects.

Statoil farm-in


Statoil will earn up to 65% interest in EP 103 and EP 104 (PetroFrontier 100%), EP 127 and EP 128 as well as exploration permit applications EPA 213 and EPA 252 (PetroFrontier 100%) under a three phase farm-in totalling up to US$210 million (A$200.8 million).

Throughout this farm-in period, Baraka will be part of all decisions made, in relation to expenditures, to its 25% interests in both EP 127 and EP 128. It will also pay for its share of costs in the permits and the 75% stake it holds in the 75 square kilometre area around the Elkedra-7 well in EP 128.

Analysis

Proactive Investors believes that momentum will build again for Baraka as the stimulation program at the Baldwin well is completed and the completion crew will move on to stimulate the Owen-3H well. Baraka is leveraged to success of PetroFrontier.

 

Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.

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