The conventional and unconventional potential of the Cooper and Eromanga basins has companies flocking to South Australia for a chance to discover gas, oil or both, with the latest offer for four exploration licenses attracting 16 bids.

Wells drilled in the four-block area so far have been plugged and abandoned after failing to intersect commercial quantities of oil, but that is not stopping companies from taking another shot in the country’s most mature oil and gas province. Oil and gas companies are finding success in the basins. Beach Energy’s Stunsail-1 exploration well, for example, hit oil pay over the McKinlay/Top Namur, Mid-Namur and Birkhead reservoirs in the western flank of the Cooper Basin earlier this year.

Bids closed for the four blocks, which include acreage in the multiple-stacked Eromanga Basin oil play, on May 29. However, it is too early for South Australia’s Department for Manufacturing, Innovation, Trade, Resources and Energy (DMITRE) to reveal which companies won which blocks and which blocks garnered the most bids. That news could come next month, according to a statement provided by Elinor Alexander, the department’s geology and exploration director, to E&P.

“Evaluation and scoring of the bids are in progress. Winning bidders and bids will be announced once due diligence is concluded, estimated to be in early July,” Alexander said. “Work program bids include exploration wells, geophysical surveys and studies over five years, with each bid stating how many of the five years are ‘guaranteed.’ The bids received all lie within the historical range of the previous 10 Cooper Basin region bidding rounds held since 1998.”

Both Australian and international exploration companies submitted proposals for the four blocks. Based on acreage release information, blocks offered included:

  • CO2013-A: Covering 627 sq km (242 sq miles) with potential for unconventional gas plays, multiple stacked Eromanga Basin oil plays along the Permian zero edge and conventional four-way dip and stratigraphic Cooper Basin gas plays;
  • CO2013-B: Covering 3,443 sq km (1,329 sq miles) with potential for migrated hydrocarbons beyond the Permian zero edge and unconventional plays that include deep coal seam gas; and
  • CO2013-C and CO2013-D: Covering 1,950 sq km (753 sq miles) and 3,114 sq km (1,202 sq miles), respectively, each with potential for migrated hydrocarbons beyond the Permian and Triassic zero edge.

“The Cooper-Eromanga basins are the nation’s most prospective onshore oil and gas provinces, supplying gas to southeastern Australian gas markets since 1969 and producing oil for export via Port Bonython since 1983,” Alexander said. “The four CO2013 blocks cover an area of more than 9,000 square kilometres [3,475 sq miles] and possibly contain conventional and unconventional gas plays, while one block is on trend with the highly productive western flank oil play.

“Explorers have sustained a 56% rate of success in finding an average of 2.5 million barrels of oil per new field discovery in the western flank oil play in the Cooper-Eromanga basins,” she continued. “Explorers are also very active—expending hundreds of millions of dollars—in delineating giant-in-size gas resource plays on the Cooper Basin. Existing infrastructure is another advantage. Oil production can be brought on line within months of discovery.”

However, there are some geological challenges, and these differ depending on the resource type.

“The key geologic challenge for oil exploration lies outside the existing limits of oil discoveries and relates to uncertain oil migration fairways from oil source rock kitchens,” Alexander said. “The key geologic challenges for exploring for natural gas in low-permeability unconventional reservoirs (including shales, siltstones, tight sandstones and coal seams) are twofold: sweet-spot detection e.g. knowing where to drill; and devising/deploying lowest-cost and highest-productivity drilling and fracture stimulation programs.”

Wells have been drilled in all blocks except Block B. Activity has been the highest for Block D, where eight wells have been drilled. But DMITRE noted that all wells were plugged and abandoned. These include the Seacliff-1 well, which recorded “poor to good oil shows in the Murta Formation but only recovered mud and filtrate cut water on DST.”

With more than 2,000 wells, the Cooper Basin spans 35,000 sq km (13,510 sq miles) in South Australia with widespread hydrocarbon shows over eight formations, according to DMITRE.

Contact the author, Velda Addison, at vaddison@hartenergy.com.