GOP takes birds-eye view of explorationMonday, October 10,...

GOP takes birds-eye view of exploration



Monday, October 10, 2005
MELBOURNE-based Gippsland Offshore Petroleum (GOP) is a company in a hurry. Barely a year since its formation and less than 10 months after raising $12 million and listing on the ASX, the Lakes Oil spin-off is using the technology behind a new theory for Gippsland Basin oil migration as a springboard to tackle similar challenges in the wider world. By RICK WILKINSON

Last week it won four permits in the little-known Walton Basin, offshore Jamaica and it has also joined a study group to look for opportunities onshore continental Europe. Both these moves are concentrating on areas that have been ignored because previous seismic work has failed to provide a clear picture of the subsurface potential.

At the same time, GOP is nearing a moment of truth closer to home. The company should have the initial results of its Gippsland program as early as today and a clearer indication by the end of the week when the offshore Gilbert-1 wildcat in Vic/P47 has penetrated all three of its target zones.

The key to GOP's work is a highly specialised and trademark-registered aerial gravity survey technique known as Falcon, a BHP Billiton proprietary system brought to a company called Gravity Capital, now Gravity Diamonds, in 2001. Two directors of Gravity Diamonds, geophysicists Phillip Harman and Nicholas Limb, are on GOP's board.

Falcon measures minute changes in the earth's gravity, which can indicate potential petroleum reserves. The system can indentify structures missed by other exploration techniques, according to GOP.

The company dismisses concerns about going too far too fast, saying it has a clear vision and an experienced geophysical team, including newly recruited exploration manager Peter Nicholls, who has also worked with the Falcon technique at BHP Billiton and Gravity Diamonds over a number of years.

The company's foundation philosophy is that oil is migrating north out of the central Gippsland Basin towards the coast and the onshore sector. That's hardly news to most explorers past or present, but GOP has refined this theory to suggest that some of the oil originally trapped in fields in the central area has been pushed out by late migrating gas into unexplored shallow traps close to the coast.

The company points to residual oil in gas fields like Patricia/Baleen, Moby, Flathead and Whale in the eastern sector of the basin to support the idea.

Narrowing the theory down to specific targets, GOP has made use of Falcon to define the structural framework of the region immediately offshore from Marlo and Orbost in east Gippsland and to indicate where the oil spilt from the central fields might fetch up. Gilbert is the first choice.

The primary target is the Gurnard Formation, which contained the residual oil shows at Patricia/Baleen and Moby. This reservoir sand is expected to be 60m thick at Gilbert.

The next target down is the Latrobe Formation, which contains the main reservoir sand in the productive parts of the basin. Pre-drill estimates suggest it is 120m thick at Gilbert.

Finally, GOP has programmed the well to drill 200m into the underlying Strzelecki Formation, which has been found to contain abundant gas in onshore locations, albeit in tight sands.

The Schlumberger logging-while-drilling technique is being used at Gilbert-1 to provide an immediate record of progress.

But a lack of oil in the well would not cause complete dismay as there are several other prospects and leads even closer to the coast.

Gilbert West is in Vic/P47 and a ready-to-drill feature called Foster has been defined as a Top Latrobe pinchout-against-basement play in adjoining permit Vic/P40V to the north where GOP is earning a 51% interest.

The company is also checking the gas-forced oil migration path theory with an onshore stratigraphic well called Patrobus-1 in permit PEP155 near Marlo. It is located in a sub-basin newly identified by the Falcon aerial gravity surveys.

Ideally, this well was to have been drilled before Gilbert but a combination of rig delivery and downhole mechanical problems has delayed the work.

Nevertheless the data will be useful in planning the forward program, including the drilling of an onshore prospect called Banjo-1 in PEP155, which is described as the last structure before reaching the Gippsland Basin's northern margin.

Although thousands of kilometres away in the northern hemisphere, GOP's new Jamaica permits have a similar 'new edge' component. They are being tackled 50:50 with another new exploration company called Finder Exploration Pty Ltd based in Perth.

GOP's chief operating officer Cathy Norman says the principals behind Finder, Jan Ostby and Od Arne-Larsen, are like-minded former colleagues.

All three previously worked together at global geophysical company Fugro and have seen several parts of the world being passed over by most exploration companies because of poor seismic results.

This is certainly the case in the Walton Basin, offshore Jamaica where reef carbonates have distorted and weakened the seismic signals, producing a vague image of the subsurface.

The most recent surveys and wells in the region were in the 1980s. Seeking to re-kindle interest in the light of high world oil prices, the Jamaican Government opened its first bidding round early this year. The round was open for six months.

GOP and Finder examined the available pre-bid package, saw untested potential and decided to make a bid.

Against competition from eight other companies who bought the same package the joint venture was awarded all of the four permits it sought. This amounts to 10,000 square kilometres over the entire Walton Basin,which is an intracratonic feature between Jamaica/Cuba and Honduras/Nicaragua in Central America.

The companies are currently finalising a production sharing contract, so full details of the work program are not yet available. But it will consist of seismic reprocessing and acquisition of new seismic data with drop options at each stage leading to a possible well in each permit towards the end of the five-year term.

A feature of the work will be the airborne geophysics, which has been a guiding tool for GOP's program in Gippsland. The joint venture is encouraged by the presence of good source rocks seen in outcrop on Jamaica itself.

There are also abundant leads, which include structural trap potential and Miocene-age reef plays. Ten of the 11 wells drilled in the basin to date have encountered oil shows and all of them are located on the basin flanks. Onshore seeps confirm the presence of an active petroleum generation system.

GOP's study group investigation in continental Europe with another unconventional junior, Gas2Grid Ltd, is still in the early stages. But the same philosophy of seeking opportunities that have been passed over by earlier exploration work is being applied.