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Australia Q3 2019 Exploration Drilling Review: onshore appraisal and near-field exploration surge; offshore levels highest since 2016, though still subdued
25 October 2019
Exploration and appraisal drilling during 2019 has seen quarter
on quarter increases; in Q3 (July - September) there were around 37
new conventional wells spudded, an almost 40% increase on Q2. As in
previous quarters, the majority of these were onshore, and were
primarily appraisal wells.
Figure 1: Quarterly comparison of well spuds
(2018-2019).
Offshore, Q3 2019 saw three new wells spudded - matching Q2 and
taking the total for 2019 to the highest levels seen since 2016
(and with a quarter still to go!) This recovery in offshore
drilling is being mirrored by some of the recent exploration permit
awards offshore, where operators are once again proposing wells
within the first, committed, three-year term. Of the drilling in Q3
2019, two of the wells spudded were exploration - Bratwurst 1,
spudded by Shell and Annie 1, being drilled by Cooper Energy - and
both were still ongoing as of October 2019. The third offshore well
was Santos' Dorado 3, appraising the significant Dorado discovery;
as of October 2019 test results had been successful and the joint
venture are continuing to evaluate development potential of the
asset. The Dorado 3 well in Q3 followed the Dorado 2 well in Q2,
which was also successfully drilled.
Once again, Santos' Roebuck campaign was part of a programme
that made the company the most active operator in the quarter;
Santos also operated 50% of the onshore wells between July and
September. All but two of Santos' onshore wells were appraisal
drilling; of the two exploration wells, one - Wackett South 1 -
made a gas discovery, while the other - Cascade 1 - encountered
only shows.
Beach Energy was, again, the second most active onshore
operator, spudding 14 wells during the quarter. Similar to Santos,
all bar two were appraisal wells. Beach's exploration saw Wirruna 1
encountering just gas shows and Dombey 1, located in the Otway
Basin, ongoing as of mid-October 2019. The latter has been reported
to have made a gas discovery, with evaluation continuing.
The final two onshore wells of the quarter were spudded by Buru
Energy and Comet Ridge. Buru's Adoxa 1 and Comet Ridge's Albany 2
wells were suspended during the quarter and both are now awaiting
further testing. Adoxa 1 is part of a wider Canning Basin
exploration drilling programme Buru is undertaking, with Miani 1
spudding a couple of days after the quarter concluded, on 2 October
2019.
The majority of onshore drilling takes place within the
Cooper-Eromanga Basin, a mature, well-explored basin with small to
medium discoveries and a high success rate. However the
commencement of Buru's Canning Basin programme has contributed to
the onshore drilling outside of this basin, which saw five wells
spudded in other areas in Q3 2019 (up from three in Q2 and none in
Q1).
Drilling post-quarter end, to date, has seen two further wells
spudded. One is the Miani 1 well, outlined above, and the other is
a continuation of Comet Ridge's Albany drilling programme, with the
re-entry of the Albany 1 well currently also ongoing.
Figure 2: Onshore E&A wells 2019; Onshore well spuds
2014-2019.
In the unconventional sector, coalbed methane (CBM) exploration
continued at several projects in Q3 2019. Though drilling had
primarily switched to development, in light of the three CBM to LNG
projects being onstream, exploration in certain areas remains in
progress. In Q3 this included exploration and appraisal at Senex
Energy's Project Atlas and Central Petroleum's Range project, both
located in the Bowen-Surat Basin.
In the coming quarter, to year end, we are expecting to see
continued solid levels of onshore exploration, with a number of
wells planned across the Cooper-Eromanga, Perth and Otway basins.
Offshore, there is potential for a couple more wells to be added to
the 2019 total, which as mentioned is already at the highest levels
since 2016, but many operators are now lining up their 2020
offshore drilling plans.
Frances Hulbert is Technical Research Associate Director
for the Australasia Regional Team, running the team of researchers
and analysts that cover upstream E&P activity across the
region.