Delores Evaluation Suggests P50 Gas-In-Place of 547 Bcf
Meridian says an independent evaluation was carried out on its Delores Prospect by RPS Energy. Scott Pickford, of RPS Energy carried out the independent evaluation of the Delores Prospect and have classified the Prospect as Prospective Resources (using the SPE/WPC as the Standard required by the AIM Guidance) with a "best estimate" Gas-In-Place of 547 Bcf (approximately 91mmboe) for the Prospect. This results in an estimated P50 gas recoverable of 432 Bcf, based on approximately 80% recovery factor (approximately 72 mmboe). Scott Pickford assigns a chance of success of 20% or 1 in 5 to the Delores Prospect.
The prospect is located in license PELA 132 in the Arrowie Basin, onshore South Australia, located some 40 kilometers east of the Moomba-Adelaide gas pipeline linking the Cooper Basin gas fields to the South Australian gas consumers. Meridian has a 100% working interest in the license and is planning to drill the Delores Prospect later this year.
The Delores Prospect is covered by a moderate density 2D survey originally shot and processed in 1986. The original interpretation of this data revealed a structural feature which showed a strong amplitude anomaly which appeared to basically match the structural closure. To further evaluate the prospect area, 10 lines were reprocessed by Meridian in 2006 utilizing such techniques as to preserve the amplitudes within the dataset for Amplitude versus Offset ("AVO") analysis to be undertaken. The analysis shows that there are some marked AVO responses within the data and this has been interpreted as potentially indicating gas filled porous sandstones to be present.
PELA 132 is one of four licenses in which Meridian has a 100% working interest (PELA 131, 132, 133 & 134) within the Arrowie Basin, which covers some 35,000 square kilometers. Meridian expects that there would be additional potential to be worked up in the event of a success at Delores.
The demand for gas in the region is increasing steadily and the market was recently de-regulated. The Petroleum Act of 2000 means that the licensing and fiscal regime in Australia is now very attractive with a 'tax and royalty' system which allows for various exploration and operating cost recovery before tax is calculated.
Mr. Tony Mason, Chief Executive of Meridian, said:
"An estimated P50 Gas-in-Place of 547 Bcf is a very significant outcome for Delores and for Meridian with the prospect of further potential in the Basin from our other licenses. The demand for gas in the region is growing while market de-regulation and a favourable licensing and fiscal regime make for a very attractive operating environment.
"Exploitation of Delores will be best achieved with a locally-based partner. We are in active discussions with a potential partner with a view to commencing drilling around the turn of the year."
Mr Andrew J. Kirchin, Managing Director of Scott Pickford, who meets the criteria of a qualified person under the AIM rule guidance for mining, oil and gas companies, has reviewed and approved the technical information contained within this announcement.
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