Jade Energy North Perth Basin L14 Licence Farmout & Investment Opportunities

Jade Energy North Perth Basin L14 Licence Farmout & Investment Opportunities

Jade Energy Holdings Pte Ltd (“Jade”), through its subsidiary company RCMA Australia Pty Ltd (“RCMA”), holds a 93.7% interest in production licence L14 over the Jingemia oilfield situated in the northern onshore Perth Basin, 360km north of Perth, Western Australia (the “Field”) (the “Licence”). The Licence covers an area of 9,835 acres. RCMA is the operator of the Field producing light oil from a Dongara Sandstone reservoir. Production commenced late 2003 and to date 4.6 million barrels have been produced. There are extensive surface facilities in place including oil storage, separators, piping, export, and water injection facilities. The Field has 4 oil wells and 4 water injection wells of which 3 are operational and 1 suspended.

Northern Onshore Perth Basin Farm Out Deal Closed:
 On the 9th of September 2019, Jade, through RCMA, executed a farm-in agreement with ASX-listed Metgasco Energy Limited (“MEL”). MEL has committed to drill up to two exploration wells in the Licence.

Terms:
MEL will receive an equity interest of 60% of the discovery from the exploration well (subject to securing additional funding) and shall pay 100% of the well costs of the exploration well, and MEL shall have the right to select the prospect to be drilled. With a firm commitment MEL is obliged to drill through the Dongara, Kingia, and High Cliff formations to a maximum depth of 2900 metres by the end of Q3 2020 and, from April to December 2020, MEL has the option to commit to drill a second well.

Cervantes Drill Target:
Sub-surface work, connecting onshore and offshore geophysical work and mapping, has identified the 3D seismically defined conventional oil prospect Cervantes, estimated to contain between 6 & 42 mmbo of gross recoverable prospective oil resources. The P50 estimate of contingent gross recoverable oil resource in Cervantes is 15.4million bbls.

Ongoing Sub Surface Works:
A comprehensive geological models of the Licence area was developed and assessed for conventional oil and gas opportunities in the block and is currently preparing to reprocess 2D & 3D seismic across the Licence area to better define prospects, optimise drilling plans, and assist the next farmout process due to commence from November 2019.

L14 Licence Portfolio Of Proved Reserves, Worked Up Prospects And Leads - Jade Estimates


Landmark Crude Purchasing and Processing Deal:

MEL has committed to sell to Jade all oil discovered from any well drilled at a market reflective pricing, less trucking costs to market and less Jade’s midstream operations & processing tariff. This tariff per bbl may increase to cost plus a small margin if the costs of processing exceed the tariff. This innovative processing deal stapled to the farmout:
enables explorers in the Licence to go to production with minimal development capital;

  • enables explorers to achieve production in months and benefit from
  • economies of scale; and
  • establishes Jade as the first third party crude processor in WA.

Jade’s Midstream L14 Processing Capacity: 
Jade currently has circa 6000 bopd and 24,000 bpd water processing capacity which can be readily utilised for new discoveries and Jade is able to potentially expand the plant and export facilities on an as-needed basis. For large oil discoveries, Jade has already investigated the feasibility of exports via a nearby deep-water port with tankage.

The Cervantes Prospect: First Drill Targeted To Be Confirmed Prior To 15 November 2019

The Cervantes prospect is located in the Western Flank area of the Licence area to the south west of the Field and has produced 4.6 mmbo to date. The location is within the SW-NE Dongara Sandstone depositional trend that includes prolific nearby oilfields such as Cliff Head, Jingemia, and Hovea.

Figure 1: L14 / North Perth Basin Map

It is mapped as a tilted fault block (Proven Trap) with the primary target, the Kingia SS, currently mapped as juxtaposed across the bounding fault to the primary Perth Basin oil source, the Kockatea Shale.

Figure 2: Structural cross section of region relative to Cervantes

The Cervantes prospect has been assessed to feature high quality Kingia-High Cliff sands, which are excellent gas producer at Waitsia, at the shallowest depths in the North Perth Basin. The structure includes Kockatea shale oil which is the source charge of the Kingia formation.

Figure 3: Cervantes top structure map for the Kingia and Dongara Formations

Western Brush Cattamarra Four Way Closure Target

The Western Brush prospect is an observed rollover at the Cattamarra Coal Measures and is an analogue of other North Perth Basin discoveries eg: Hovea Oil and Gas Field, Waitsia Gas Field, Beharra-2 Gas discovery, and North Yardanogo-1 oil discovery (See figure 1).

Figure 4: Western Brush Cattamarra rollover

Jade Midstream L14 Oil Processing And Export Facility

The facility for rapid conversion of prospective resources to producing reserves has been generated via a 3rd party oil processing and operations agreement with operator RCMA.

This agreement enables Jade to achieve profitable price realization within 3 to 6 months of any oil discovery, returning early cash flows to investors well ahead of any other opportunity in the Perth Basin.

All prospects are located between 3 and 6 km from Jade’s oil processing plant.

Q4 2019 To Q2 2020 Investment Opportunities In L14

Opportunity To Drill Uncommitted L14 Prospects

Over the next four months, Jade will be seeking firm commitments for the drilling of at least three additional prospects in the Field by one or more investors targeting the identified oil potential in the stacked Cattamarra, Dongara, Kingia, and High Cliff formations.

This effort will be supported by reprocessed 2D and 3D seismic studies over the prospects, which have been estimated to contain over 348 million bbls of contingent oil resource in place in reservoirs which are between 1200 and 2800 metres deep.

Jade has developed a low-cost strategy to access these resources which will lead to a paradigm shift in the Perth Basin in terms of drill-to-log costs.

Jingemia Oil Production Investment

To balance its energy portfolio, Jade is willing to offer 50% of the production from the Field to investors on the following attractive terms:

  • pass-through of crude oil market price less transport, processing and operating costs
  • no abandonment costs on wells or plant (production-only deal)
  • estimated 2P economically recoverable reserves in the order of 900,000 to 1.2 million bbls
  • Material upside from enhanced water flood, attic oil in-fill drilling 7 polymer injection into water
  • Investor may staple production deal to farm-in

Jade will supply investors with independent reserves certificate(s) supported by static model, reservoir engineering, production history from new ESPs and tubing, and 3D seismic studies.

Jade intends to close this transaction in October to December 2019.

For further information, please contact:

Chris Newport
Director, Oil and Gas
+61 467 456 043
chris.newport@rcma.com

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