Stuart Petroleum Buys Rights to Explore Gippsland Block, Offshore Australia
Australian-Canadian Oil Royalties (ACOR) (OTCBB:AUCAF) says that Cooper/Eromanga Basin producer Stuart Petroleum has moved into its first offshore venture and its first venture outside South Australia, teaming up with Cue Petroleum, Exoil and Moby Oil & Gas to tackle the Bazzard prospect in offshore Gippsland block VIC/P53 on ACOR's ORRI, offshore Australia.
Stuart will earn a 50% interest in the relevant discovery area. It may later choose to take 50% and operatorship in the VIC/P53 permit as a whole. Stuart will begin its involvement in the block by committing to the drilling and sole funding of an exploration well, Bazzard-1, to test a four-way dip closure that the company believes could hold 30-50 million barrels of oil.
The approximately 129,483 acres Bazzard 3D, recorded from early March 2005, has provided the newest dataset that Stuart used to identify and rank prospects for drilling by 2008, assuming the JV receives approval to extend year three of the permit to facilitate this.
The 3D was aimed at providing finer delineation of a number of pre-existing leads, including Cod West, Updip Veilfin, Catfish, Bazzard, Spineback and Hake, with a secondary objective of identifying any additional Latrobe Group targets that may exist.
The Approximately $180 Billion Dollar Neighborhood That Surrounds VIC/P53
When purchasing Real Estate you are always told: Location, Location, & Location. Guess what, when purchasing oil & gas ORRI's it is the same principle, Location, Location, & Location. ACOR management feels that VIC/P53 is located in a fantastic location.
ACOR's ORRI under VIC/P53 consists of 182,858 gross acres. VIC/P53 is also called the "Hole of the Doughnut" as it is surrounded by 9 giant producing oil & gas fields, leaving VIC/P53 in the middle. For example, some of the very best oil production in the world is found in the Gippsland Basin in the Halibut Oil Field. The Halibut Oil Field is approx. 1.8 miles west of ACOR's VIC/P53, where the average well has produced 60,000,000 bbls of oil or $3,600,000,000 worth of oil per well, at today's prices of $60.00 per barrel.
The nine giant oil & gas fields that surround ACOR's ORRI under VIC/P53 have some very impressive production figures (see below). It is important to note that the fields listed below are still producing.
- Kingfish Field was discovered in 1967 and has produced 1,100,000,000 barrels of oil or $66,000,000,000 at current market prices of $60.00 per barrel from 41 wells.
- Bream Field started drilling in 1988 and has produced 88,000,000 barrels of oil or $5,280,000,000 at current market prices of $60.00 per barrel from 20 wells.
- Barracouta Field started drilling in 1968 and has produced 1.1 TCF of gas or $2,750,000,000 at $2.50 per mcf gas prices from 10 wells.
- Snapper Field started drilling in 1968 and has produced 630 BCF of gas or $1,575,000,000 at $2.50 per mcf gas prices from 23 wells. The nearest well in the Snapper Field is approx. 1 mile from ACOR's VIC/P53 lease line. ACOR's Seismic work shows a seismic high coming from the Snapper Field possibly extending over into Permit 53. The Snapper Field has produced an avg. of approximately 105 BCF of gas per well.
- Marlin Field started drilling in 1968 and has produced 2.4 TCF of gas or $6,000,000,000 at $2.50 per mcf gas prices from 19 wells.
- Fortesque Field started drilling in 1982 and has produced 260,000,000 barrels of oil or $15,600,000,000 at current market prices of $60.00 per barrel from 28 wells.
- Halibut Field started drilling in 1969 and has produced 820,000,000 barrels of oil or $49,200,000,000 at current market prices of $60.00 per barrel from 14 wells.
- Cobia Field started drilling in 1983 and has produced 135,000,000 barrels of oil or $8,100,000,000 at current market prices of $60.00 per barrel from 20 wells.
- Mackerel Field started drilling in 1977 and has produced 450,000,000 barrels of oil or $27,000,000,000 at current market prices of $60.00 per barrel from 22 wells.
VIC/P53 is considered prospective for oil and gas at the top Latrobe and also at deeper intra Latrobe levels. VIC/P53 is surrounded by the oil and gas producing fields held by EXXON/BHP.
The location, adjacent to this infrastructure, and proximity to pipelines, processing facilities and major markets, offers potential advantage through infrastructure savings and gives encouragement to participation in VIC/P53. The hydrocarbons recorded at Veilfin-1 established the existence of a working petroleum system in the permit area.
ACOR owns 3/20ths of 1% ORRI under VIC/P53.
What is ACOR's 3/20ths of 1% ORRI possibly worth?
3/20ths of 1% may not sound like a like a lot. But, for example if ACOR had owned this same 3/20ths of 1% ORRI under the Kingfish Oil Field* (which ACOR does not own any ORRI's under the Kingfish Oil Field) and the Kingfish field produced 1,100,000,000 barrels of oil and the operator was able to sell it for an average of $60 per barrel, then ACOR's 3/20ths of 1 % would have generated in revenue approximately $99,000,000 before taxes.
(*Reminder: This was merely an example, ACOR does not own any ORRI's under the Kingfish oil Field)
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