in the west today-perth basin

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    Perth Basin oil prospect lures players

    By Michael Weir

    THE Perth Basin has become the hottest oil and gas play in Australia with up to $50 million earmarked for exploration in the Dongara region in the next six months.

    It is the most aggressive exploration program in the area's history and is aimed at establishing if the Perth Basin has the potential to become a world-class oil and gas province.

    The first well in the program, the Cliff Head-3 appraisal well, is due to be spudded this weekend.

    There has been strong market attention in the program and, with more than 10 companies involved in the various exploration permits, investors have a smorgasbord of options to choose from.

    Analysts predict any major success in the Perth Basin could ignite a raft of corporate activity as companies try to tidy up the scrappy permit ownership structures and gain a bigger slice of the action.

    Euroz Securities analyst Ollie Foster said the four oil and gas discoveries in the northern Perth Basin in the past 16 months was an unprecedented run of success that had sparked a series of follow-up drilling programs.

    "The Perth Basin has survived a period of 'gassy basin' stigma that saw few wells drilled, to be on the brink of a new era as an exciting and potential world-class oil and gas province," he said.

    Arc Energy, Australian Worldwide Exploration, Bounty Oil and Gas, Hardman Resources, Norwest Energy, Origin Energy, Pancontinental Oil and Gas, Roc Oil, Victoria Petroleum and Voyager Energy are among the companies with exposure to the Perth Basin drilling program.

    The Perth Basin came to life in October 2001 with the Hovea discovery, near Dongara, which is now considered the biggest onshore oilfield in WA.

    Hovea has recoverable reserves of 9.4 million barrels, enough for 10 years output, and the field is being developed to produce about 5000 barrels a day.

    Just two months later the offshore Cliff Head discovery was made, which on preliminary calculations could contain more than 110 million barrels.

    Hartleys senior resources analyst Kevin Tomlinson said the commercial potential of the Cliff Head discovery was boosted by being just 15km offshore, in water depths of less than 10m and close to regional infrastructure.

    "The discovery has significantly upgraded the hydrocarbon potential of the offshore Perth Basin, particularly since a number of undrilled prospects of significant size are recognised in the immediate vicinity of, and on trend from, the discovery well," he said.

    "The Cliff Head oil discovery is the first potentially commercial oil discovery in the northern part of the offshore Perth Basin and demonstrates the presence of a petroleum system capable of generating and entrapping significant quantities of oil.

    "It is also the first potentially commercial oil discovery offshore Australia which is majority owned and operated by small, publicly listed Australian oil companies."

    The latest success came in October with the onshore Jingemia discovery which has the potential to host five to 10 million barrels of recoverable oil.

    At least eight wells are planned for the Perth Basin in the next six months.

    One of the most anticipated wells is the offshore Twin Lions prospect, which is considered a "monster" with its target of more than 200 million barrels of recoverable oil.

    January 04, 2003

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