The permit area covers 3,662 km2 (~905,000 acres) estimated gross prospective gas resources relating to EP 371 of approximately 11.8 Tcf. Black Mountain’s goal is to pursue commercialisation of the gas resources through LNG facilities or greenfield gas upgrade opportunities, as well as the domestic market, likely on the west coast.
The Company is focused on developing early-stage, unconventional gas resources within its portfolio (EP 371) (the Black Mountain Asset or Project Valhalla). The Board believes that there is considerable opportunity for it to commercialise the Prospective Resources in Project Valhalla due to the current climate of the gas industry, in general, and the supply and demand fundamental assessment in Australia specifically.
Exploration Permit EP 371 (Valhalla Project) is located in the Fitzroy Trough in the Canning Basin, Western Australia. The permit area covers 3,662 km2 (~905,000 acres) and is located some 2,500 km northeast of Perth, Western Australia.
The Independent Technical Expert has provided a best estimate of unconventional gas prospects of approximately 11.8 Tcf and 1.5 Tcf respectfully as follows (as of 6 October 2021):
The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations.
- Prospective Gas Resource: 11,805 Bcf
- Contingent Gas Resource: 1,525 Bcf
The key criteria supporting the interpretation of the EP 371 unconventional gas occurrence as a BCGA type accumulation are:
The Company believes that the chance of discovery is considered high due to the nature of the petroleum system and the proximity of the Prospective Resources to the Contingent Resources already found in EP371. The Company believes it is likely that further exploration will result in the discovery of additional resources, potentially of sufficient quantity and quality to support a commercial development.
- All wells that penetrate the Laurel Formation in EP 371 and surrounding areas show continuous gas, indicating a pervasive accumulation beyond structural closure.
- Drilling mud data shows over-pressured sections within the target Laurel Formation.
- TOC ranges from 0.5 - 4.5 and maturity of source rock Ro >1.12 (Tmax >460 °F).
- No downdip water has been detected and gas is typically the main fluid pressure phase.
Commercialisation
Following the proposed drilling program in 2024, the Company will evaluate the status of the wells and well tests and, subject to the results, the Company’s goal will be to pursue commercialisation of the license’s gas resources. The Company understands that target markets may include gas supply to existing LNG facilities or greenfield gas upgrade opportunities, as well as the domestic market, likely on the west coast.
The Valhalla Project
BME Prospectus, page-2
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