Background in Portugal - Batalha and Pombal Concessions
In September 2015 Australis was awarded two onshore exploration concessions in the Lusitanian Basin (known as the Batalha and Pombal Concessions). The concessions cover a total area of 620,000 acres, are in the exploration phase and are presently in the 3rd of an 8-year valid term. They have a modest minimum commitment work program in the first 3 years and then require a well to be drilled in each Concession during each subsequent year of the term. The Concessions are shown in Figure 2 below and are located to the north of Lisbon.
Figure 2: Overview of the Batalha and Pombal
Concessions in the Lusitanian Basin
Australis has purchased from the Portuguese Government aeromagnetic data interpretation study, exploration well logs and 2D seismic lines across both concessions as well a 3D survey that covers part of the Batalha concession. Australis activity during the first two years of the concessions broadly consisted of data review and analysis of the 2D and 3D seismic and other existing information relating to prior wells. This has allowed us to define a potential large conventional gas discovery in the Jurassic formations and to identify likely production mechanisms that contributed to the observed 3 MMscf/d from the discovery well. Furthermore, Australis now has a preferred well design to achieve commercial flow which would allow the net 2C contingent resource of 459 Bcf be reassessed as a reserve.
Based upon work carried out by Australis an update to the contingent resource associated with the two horizons was carried out at YE 2016 and this has led to a 96% increase in the estimated recoverable resource to a 2C figure of 458.5 Bcf. The full results of the contingent resource estimates from Netherland, Sewell & Associates, Inc (“NSAI”) are summarised in Table 4 below: The Table also shows the risk prospective resources associated with undiscovered hydrocarbons which are future exploration targets:
||Net Contingent Resources
||Net Risked Prospective Resources
|Oil Equivalent (MMboe)
Table 4: Portugal Resource estimates
NSAI generated their independent contingent resource estimates using a combination of deterministic and probabilistic methods. The material assumptions and technical parameters underpinning the contingent resource estimate were set out in the announcement made to the market on 25 January 2017.