Perth • 14-02-14

Warrego Energy, Dyas and Mazarine Energy to commence AUD 40 million appraisal of West Australian gas assets

Perth, Australia, 27 February 2014

Warrego Energy today announced that it has signed an AUD 40 Million farm-out agreement with E&P businesses Dyas BV and Mazarine Energy BV for the appraisal and development of the West Erregulla tight gas field in Western Australia (WA). Located onshore within the Perth Basin, West Erregulla has been assessed to contain an estimated 185 bcf (billion cubic feet) of gas in place with a 3 tcf (trillion cubic feet) unconventional upside potential. Following the completion of the agreement and the receipt of all regulatory approvals, the equity split will provide Warrego with 20%, Dyas 30% and Mazarine Energy 50% of the equity. 3D seismic surveying will commence in 2014 followed by appraisal well drilling in 2015. Under the terms of the agreement Mazarine Energy will take over operatorship from Warrego following the completion of the appraisal program.

Duncan MacNiven, Warrego Director, commented: “We are delighted that Dyas and Mazarine Energy have partnered with Warrego and become part of the emerging onshore Western Australian gas story. We look forward to working with our Dutch partners in the appraisal and development of West Erregulla. I have no doubt that their technical and commercial capabilities will add value and assist us in maximizing returns from this exciting project.”

Dyas is a wholly-owned subsidiary of SHV Holdings N.V., a family-owned multinational in the Netherlands. SHV was founded in 1896 from a merger between a number of large coal trading companies. After the decline of coal as the primary source of energy, halfway through the twentieth century, SHV moved into other business areas. Today, the company is active in the trade and distribution of LPG, industrial services, cash-and-carry wholesale, private equity, heavy lifting and transport, and investment in upstream EP activities. SHV employs 56,000 people across 48 countries with a total turnover of 20 billion euro (2012). Dyas is an active investor, as non-operator, in oil and gas exploration, development and production joint ventures since 1964. Net UK and Netherlands developed reserves amount to some 67 million barrels of oil equivalent (“boe”) and daily production equals 20 thousand boe.

Mazarine Energy is a subsurface-driven private oil and gas exploration and production company focused on early-stage exploration and field development. The company is currently active in North Africa, where it has a majority operating interest in an onshore license in central Tunisia.  Mazarine Energy is owned and chaired by Dutch entrepreneur Edward Van Kersbergen. Edward founded the company after selling his share in upstream oil and gas consultancy Xodus Group. He took a majority stake in the company in 2011 and served as its Executive Chairman. Prior to joining Xodus, Edward founded and sold companies Horizon Energy Partners and Oyster Energy. Edward brings his own and his company’s extensive technical and commercial competence. Edward commented: “Warrego has extensive operating experience and a comprehensive knowledge of the Western Australian domestic gas sector. Mazarine Energy has considerable expertise in all aspects of oil and gas field development. The combination of Mazarine and Warrego coupled with Dyas’ technical expertise and commercial strength makes for an extremely strong team.”

WA has one of the largest onshore gas potentials in the world. The Perth Basin alone has 200 tcf risked gas in place in both conventional and unconventional prospects (source: EIA). If key challenges can be met, a supportive local government and a ready customer base bode well for the long term development of this resource.

The WA commodities industry, the customer base, is vast and consumes massive amounts of energy. A mid-sized mine can use up to 6 million barrels of diesel a year, for instance. WA has hundreds of such mines operating and in varying stages of development. The switch to gas-to-power in the mines in response to commercial and environmental drivers will become increasingly compelling. Government estimates put the looming domestic gas shortage as high as 40% over the coming decades. Opening the onshore gas market can serve as a solution to that shortage.

Dennis Donald and Duncan MacNiven set up Warrego Energy five years ago, grasping the opportunity to become pioneers in driving the WA onshore gas market. By applying proven technologies and practices common in other parts of the world but new to WA, they intend to leverage their established position in the market. Warrego’s aim was to acquire a strategic beachhead in WA. This was accomplished when they won the rights to block EP469 in the Perth Basin following a competitive tender in 2008. The block, which contains the West Erregulla field, is located close (20 kilometers) to the two pipelines that supply the potential WA customer base. With an estimated 185 bcf in place in the West Erregulla tight gas field and overlaying shale with 3 tcf potentially recoverable, Warrego remains confident of the future.

Warrego has been preparing the appraisal program for West Erregulla and gaining essential, environmental, safety and Traditional Owner permissions for the past four years. Following imminent approvals from the regulators Warrego will be in a position to shoot 3D seismic over the field early this year.

The appraisal program will proceed in two stages. A 3D seismic survey will be acquired and interpreted during the course of 2014. Assuming a successful survey outcome, the JV will proceed to drill an appraisal well on the West Erregulla structure in 2015. First gas is currently scheduled for 2016.

Dennis Donald, MD of Warrego, commented: “We are delighted that we have access to the technical and practical resources of Dyas and Mazarine Energy. Our immediate focus is to conduct the seismic and then complete our appraisal program on the West Erregulla early next year. We will then rapidly transition into full field development of the tight gas field. We see the farm-in as a demonstration of confidence in Warrego and the market by two respected and highly competent enterprises.”

Warrego expects in the midterm that the JV may be well positioned to capitalize on the substantial shale resource within EP469, following recent successes in the shale by near neighbors AWE and Norwest.

 

Donald concluded: “With a proven and strong team, an excellent potential gas resource and a willing market, we are looking forward to building our common future in Western Australia.”

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The Hague • 02-06-14

Mazarine Energy appoints Paul Korthals as Chief Financial Officer

Mazarine Energy announces that Paul Korthals has been appointed as Chief Financial Officer of the oil and gas exploration and production company.

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