Hi Oldgeo,
an excellent technical post and analysis for the potential Lockyer Deep gas field resource post the LD-2 well result.
Being familiar with the North Perth basin, I cant remember seeing any sandstone reservoirs like the Kingia at LD-2 being so over pressured.
Fooled us all, but that's mother nature for you. My darling wife kept reminding me with all the talk of a tcf gas field pre LD-2 drill result of the old saying "if its too good to be true , it usually isn't!"
I agree with the revised area of closure based on the current interpreted post LD-2 free water level and revised potential resource of approximately 240 bcf rec.
If the Lockyer Deep Gas Field turns out to be compartmentalised into several fault blocks like Waitsia, with each fault block having slightly different free water levels, then variation in the total recoverable resource may improve the ultimate recoverable resource, but not significantly.
A good decision to keep LD-2 as a well that can be used to monitor pressures in the Kingia to determine rate of pressure depletion once the field goes into production. LD-2 can also be used as a water disposal well down the road for any produced water. No point in wasting the $15 million spent drilling LD-2.
A great ride for all Norwest shareholders and we should bless our lucky stars that Chris Ellison/Minres made the takeover bid for Norwest tying the Norwest share price to the Minres share price.
And I am definitely of the view that Minres will move to 100% of Norwest under the current bid, without any Machiavellian tactics.
It doesn't look like we will see TCF gas fields in the North Perth Basin.
However, i am confident that we will see among the current permit holders a cumulative Kingia gas resources of around 5-8 tcf when all prospects drilled up.
One may take the view that Minres have paid too much for Norwest based on Net Present Value analysis, but if the two permits come up with 400-500 bcf when all prospects are drilled out, then the bid price will be fair value and will suit the Minres strategy to value add by processing their lithium and iron ore with North Perth Basin gas. Hancock Prospecting state they have the same aim.
In my opinion, if Minres wish to have a 250 million cubic feet per day gas plant, then I would speculate that we might see Minres and Hancock Prospecting moving on Strike to aggregate West Erregulla, South Erregulla and Lockyer Deep into one gas reserve to provide feedstock to one 250 million cubic feet per day gas plant.
So watch this space imho.
In closing I will leave readers with the saying from us explorationists as the ultimate optimists that we are, "that the only difference between an oil crank and an oil tycoon is an oil well!"
Again Oldgeo, thanks for the great technical posts.
Risk in everything, so do your own research.
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