RE: How hot is hot?27 Oct 2020 12:16
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The Beetaloo is one of the gas basins earmarked by the Morrison government for accelerated development as it pursues a gas-led economic recovery from COVID-19.
Mr Riddle said the better than expected results from Tanumbirini-1 augured well for a low number of wells to be required for a commercial project, reducing costs.
"That's where the productivity of the Beetaloo really differentiates itself versus other areas of Australia: it's big, it's highly productive and it can solve these shortfalls with just a handful of wells," he said.
"This is why I believe this is the hottest play on the planet ... definitely within the OECD countries."
Horizontal wells to be drilled and fracked next year at the site still need to confirm the initial readings, but Mr Riddle said that "subject to working with Santos ... we would hope we could get a pilot development going somewhere in the window of 2023 to 2025."
Mr Riddle compared the average 2.3 million cubic feet per day flow from the first 90 hours of testing at the vertical Tanumbirini-1 well with initial vertical wells at the prolific Marcellus shale play in the US which ran at about 400,000 cubic feet per day before achieving rates many times higher in horizontal drilling.
"The fact we are able to achieve mini-multiples of what the core Marcellus vertical frack has been has given us a lot of confidence that as soon as we can drill and frack horizontal wells we will be off and running with a pilot project," he said.
Mr Riddle said that a pilot production project at the acreage could produce 20 per cent or more of a forecast 500 million cubic feet a day shortfall arising in east coast gas supply.
Gas would be transported east through an enlargement of Jemena's existing Northern Gas Pipeline from Tennant Creek to Mount Isa and would be "very robust" economically at widely forecast gas prices on the east coast of $8-$10 a gigajoule.
"This is what's exciting: Other areas of Australia onshore it might take 50 wells to generate 100 million cubic feet per day, but in the Beetaloo we might only have to drill 5 to 10 wells," he said.
Drilling and fracking for unconventional gas remains highly controversial in the NT, however. Origin's annual shareholder meeting last week was dominated by concerns over its Beetaloo drilling. Still, the return of Territory Labor to government in the NT's election in August is being taken as an endorsement of the onshore gas industry, given weak support for minority parties that pledged to veto fracking.
For Tamboran the positive results from testing come at an opportune time, given its plans for a public listing in the first quarter of 2021. The Financial Review's Street Talk column has reported it is contemplating a $195 million IPO, which would be the biggest oil and gas IPO for several years, while Mr Riddle said the company was also examining a potential reverse takeover o
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