Interest in the Perth Basin is starting to ignite,...

Interest in the Perth Basin is starting to ignite, withexploration activity increasing in the region thanks to growing evidence it hasalways been a major gas hotspot.

But this state of excitement wasn’t always the case.

Wind the clock back a couple of years and while the Perth Basinwas considered to be a proven petroleum province, it just appeared to be thepoor relation of other Australian regions such as the giant gas fields to thenorth or the wildly successful Cooper Basin.

And it wasn’t hard to see why as Warrego Energy (ASX:WGO) managing director Dennis Donald explained that exploration in the region was centred around small deposits of oil — like the offshore Cliff Head oil field that is still producing at a reduced rate to this day — and small deposits of unconventional gas.

“The thing that really catapulted the Perth Basin to theforefront was the discovery of the Waitsia field by AWE. It is deep, but it’s aconventional and prolific gas play,” he told *.

Waitsia was discovered by AWE in 2014 and it quickly grew tobecome Australia’s largest onshore gas field by 2016, with first gas from thewell sent down the Parmelia pipeline to Perth.

AWE was subsequently taken over by Mitsui for $600m in 2018, andsince then the Japanese company has been working with Beach Energy (ASX:BPT) to drive further development of the field, with a final investment decision on stage two expected in the September 2020 quarter.

Perhaps more importantly, Waitsia proved that the porosity andpermeability of the Kingia and High Cliff formations were commercial, promptingthe industry to go back to the drawing board and have a look at this deep gasplay, according to Norwest Energy (ASX:NEW) managing director Iain Smith.

However, it wasn’t until Warrego and Strike Energy (ASX:STX) drilled the successful West Eregulla-2 well, which proved the same productivity and the excellent sands that are present in Waitsia were also present to the southeast, that interest in the Perth Basin was really stoked.

West Erregulla-2 shattered expectations when it flowed a stunning 69million cubic feet of gas per day (MMcfd) from the primary target Kingia Sandstone, well above the 50MMcfd target that operator Strike had estimated in September and comparable to the flow test results from the initial wells at Waitsia.