FAR Reports Prospective Resources of 447 MMboe at 2 Permits in WA

FAR Ltd., Australia's independent oil and gas explorer, reported Tuesday that a geotechnical evaluation of the company's offshore Western Australia exploration permits WA-457-P and WA-458-P in Australia’s Dampier Basin has identified multiple prospects with total prospective resources amounting to 447 million barrels of oil equivalent, or MMboe, (unrisked best estimate basis) net to FAR.

Existing extensive vintage 3D seismic and 2D seismic data covering both permits as well as exiting well data were used to calculate the resource estimates.

The permits are located within an active petroleum system on the North West Shelf and are surrounded by oil and gas discoveries. Water depths are 82 to 361 feet (25 to 110 meters).

In a new 3D seismic survey covering both permits planned for mid-2014, FAR will use recently developed modern acquisition and processing techniques that are optimized for hydrocarbon detection. FAR will use this new data to high grade and de-risk prospects identified for future drilling.

Subject to encouraging results, FAR expects to proceed with drilling in a later subsequent exploration period.

FAR has a 100 percent interest and is Operator of the WA-457-P and WA-458-P permits.

FAR managing director, Cath Norman, said, “FAR’s hydrocarbon resource assessment confirms the significant potential of FAR’s offshore Western Australian permits. Shallow water depths and high success rates for the basin provide for attractive, low risk and low cost exploration. FAR now expects to acquire modern 3D seismic data over both permits during 2014 and will also be seeking a farm in partner. Our Australian permits are an attractive component of our diversified exploration portfolio and have the potential to add significant value for our shareholders.”

With respect to the Prospective Resource estimates contained within this report, it should be noted that the estimated quantities of Petroleum that may potentially be recovered by the future application of a development project may relate to undiscovered accumulations. These estimates have an associated risk of discovery and risk of development. Further exploration and appraisal is required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

Background

Hydrocarbon exploration in the Dampier Sub-basin dates back to the late 1960s when Legendre-1 encountered oil. Since then, over 200 exploration and development wells have been drilled with an exploration technical success rate of 41 percent. Commercial success rates are more than 20 precent. Historically, the exploration focus has been on structural traps, with wells concentrated along the basin margins and along prominent inversion trends. More recently, exploration has begun to test the stratigraphic trapping potential closer to the main depositional-centres where turbidite sands are more concentrated.

WA-458-P

WA-458-P is in the North East of the Dampier Basin and is surrounded by discoveries. Oil is the dominant hydrocarbon phase in the nearby discoveries and charge modelling indicates that oil is the expected hydrocarbon phase in the identified features. Localised uplift has created simple roll-overs at multiple levels. FAR has mapped a variety of structural and combined structural-stratigraphic leads at proven reservoir levels. The total prospective resources mapped in WA-458-P net to FAR amount to 359 MMboe (unrisked best estimate basis).

WA-457-P

The main feature in WA-457-P, in the South West of the basin, is a very large four-way closure at the highly prospective Oxfordian Angel Formation level. This structure was drilled in 1968 by the Dampier-1 well, which encountered good oil and gas shows, and recovered oil and gas to surface, however sand development was generally poor. Regional studies have now shown that the Angel Formation is a turbidite reservoir and sands are restricted to the main channel belts. Dampier-1 was drilled on 1960s vintage 2D seismic targeting a structural high, without consideration of sand presence. FAR's work program is designed to identify the areas where sands are better developed and to locate an appraisal well.

The Dampier structure has potential to contain a total of 800 billion cubic feet (Bcf) of gas and 16 million barrels of associated condensate (unrisked best estimate basis). The volume net to FAR Limited within WA-457-P is 459 Bcf of gas and 9.2 million barrels of associated condensate (unrisked best estimate basis). This equates to 88 MMboe of oil equivalent.

Both permits are covered by extensive vintage 2D and 3D seismic data. FAR’s intention is to utilize modern acquisition and processing techniques in a new 3D seismic survey planned for 2014, which are optimized for hydrocarbon detection. The data will be used to high grade and de-risk prospects for drilling in a subsequent exploration period by July 2016 following a drill or drop decision in 2015.

Hydrocarbon Resource Estimates

The hydrocarbon resource estimates for Western Australia permits WA-457-P and WA-458-P are internal unaudited estimates prepared by FAR as at March 11. Extensive 3D seismic, 2D seismic and well data were used to calculate the trap sizes and reservoir parameters which were used in the volume estimates. The estimates have been prepared in accordance with the definitions and guidelines set forth in the Petroleum Resources Management System, 2007 and 2011 approved by the Society of Petroleum Engineers and have been prepared on a probabilistic basis. The estimates are unrisked and should be read in conjunction with the notes that follow.

WA-458-P (Unrisked Prospective Resources – Best Estimate)

  • Top Angel A (Prospect): Angel Formation (Play) - 20.7 million barrels of oil
  • Lower Angel B (Prospect): Angel Formation (Play) - 2.1 million barrels of oil
  • Lower Angel C (Prospect): Angel Formation (Play) - 3.7 million barrels of oil
  • Lower Angel Channel North (Prospect): Angel Formation (Play) - 70.0 million barrels of oil
  • Lower Angel Channel South (Prospect): Angel Formation (Play) - 82.2 million barrels of oil
  • Southern Fan (Prospect): Oxfordian Fan (Play) - 126.8 million barrels of oil
  • Updip Pleiades (Prospect): Legendre Formation (Play) - 25.4 million barrels of oil
  • Legendre A (Prospect): Legendre Formation (Play) - 6.2 million barrels of oil
  • Legendre B (Prospect): Legendre Formation (Play) - 9.8 million barrels of oil
  • Legendre C (Prospect): Legendre Formation (Play) - 12.0 million barrels of oil
  • Total: 358.9 million barrels of oil
  • Total net to FAR: 358.9 million barrels of oil

WA-457-P (Unrisked Prospective Resources – Best Estimate)

Dampier (Prospect): Angel Formation (Play)

  • Gas (Bcf): 799.2 (Whole prospect); 458.5 (Net to FAR)
  • Condensate (million barrels): 16.0 (Whole prospect); 9.2(Net to FAR)
  • Total MMboe: 153.8 (Whole prospect); 88.2 (Net to FAR)

Prospective resources mapped in WA-457-P and WA-458-P (unrisked best estimate basis).



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