NWE 0.00% 5.6¢ norwest energy nl

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    CHIEF EXECUTIVE
    officer Peter Munachen
    describes Norwest Energys
    activities in the last six
    months as a rebuilding exercise.
    During that time, Norwest has
    rebadged itself and carried out an
    airborne survey that has given the
    company the confidence to identify its
    prospects as firm drill targets.
    It also marks a shift in Norwests
    strategy to move from being a
    participant in joint ventures to an
    operator, with its 100%-held offshore
    permit TP/15 its showcase project.
    The work Norwest Energy has
    carried out already is evidence of the
    new focus and a clear commitment
    to build shareholder value through
    implementing this strategy in 2010.
    TP/15 was the target of an airborne
    full tensor gravity (FTG) gradiometry
    imaging survey that was flown in
    September last year, and is now the
    subject of farm-out talks with both
    local and international companies.
    Norwest is well advanced with
    negotiations and aims to finalise the
    farm-out of half the permit, while
    retaining operatorship, in March this
    year.
    FTG measures the gradient of the
    Earths gravity field, records shifts
    in the density of underlying rocks
    and can clarify the local geological
    picture when seismic surveys might
    not be capable of getting a good
    look. This relatively new technology
    is cost-effective, non-intrusive and
    copes well with complex geology and
    changes in terrain.
    Munachen believes FTG offers
    a real edge for companies with the
    expertise to use it effectively, and
    singled it out as a good example of
    the way in which Norwest intends
    to go about its business in future
    programs.
    Norwest has identified Xanadu,
    which has potential recoverable
    reserves of 27-28 million barrels of
    oil, and the Redhill South prospect,
    which Munachen said was small but
    sweet.
    The law of exploration is you
    drill your best target first, he said.
    We are structuring the farm-in to
    be a multiple-well commitment. We
    dont want to drill just one well and
    we want a partner that will share the
    vision with us.
    Munachen compared Xanadu
    with Roc Oils offshore Cliff Head
    oil field, noting that while estimates
    on recoverable reserves there had
    dropped from around 30MMbbl to
    12MMbbl, it remained sizeable and
    commercial.
    Norwest is already making
    progress in TP/15, holding discussions
    with a well construction and drilling
    engineering specialist group to
    help source a suitable drilling rig.
    The team will be involved with
    well design as well as planning and
    permitting.
    We will continue well planning
    as we need to drill it under the Mines
    Departments requirements by the end
    of the year, Munachen said. The
    well planning people need to identify
    a rig capable of directionally drilling
    from onshore towards offshore
    targets.
    The feasibility of drilling both
    Xanadu and Redhill South from
    onshore sites will greatly reduce
    exploration costs.
    He noted that while Xanadu
    would cost about $7 million to drill,
    a discovery there would still require
    three or four wells to optimise
    recovery.
    Importantly, Norwest is also
    continuing to refine its data over other
    prospects in TP/15, such as Capel and
    Metricup, both of which Munachen
    hopes will keep the company busy
    even if both Xanadu and Redhill
    South prove successful.
    While the offshore TP/15 permit is
    firmly at the top of its list, Norwest is
    also active in the rest of the onshore
    Perth Basin.
    In late January the company
    moved to buy out Origin Energys
    stake in EP 413, which surrounds the
    producing Jingemia field about 25km
    south of the town of Dongara. This,
    together with Roc Oils exit from the
    permit, will give Norwest a 50.593%
    stake in the acreage.
    It also fulfils Munachens interest
    in increasing Norwests exposure to
    the northern Perth Basin, which he
    considers to be under-explored and
    offering many opportunities.
    Our interest is focused on what
    we have got, expanding our presence
    in the basin and taking up any
    opportunities that emerge, he said.
    company profile
    44
    australia
    norwest energy
    Our interest is focused on what we have
    got, expanding our presence in the basin and
    taking up any opportunities that emerge.
    peter munachen
    norwest energy
    rebuilding gives
    explorer more energy
    The impending conclusion of farm-out talks and acquisition of a larger stake in a permit surrounding
    the Jingemia oil field has Norwest Energy well placed for petroleum exploration in the Perth Basin.
    MARCH/APRIL 2010 RESOURCESTOCKS
    45
    Norwest is not alone in its
    endeavours in the region. Besides the
    Cliff Head and Jingemia fields, the
    Perth Basin is also home to the
    AWE-operated Hovea/Eremia oil
    field, as well as the Beharra Springs,
    Dongara and Woodada gas fields.
    The basin has been the subject of
    recent drilling, including Empire Oil
    & Gass Gingin West-1 exploration
    well, Origin Energy and AWEs
    Redback South-1 gas discovery, and
    the Jingemia-12 development well.
    Gingin West-1 targeted 32.8 billion
    cubic feet of gas and 400,000 barrels
    of condensate in a simple anticline
    to the south and updip from the
    Bootine-1 gas discovery well.
    Empire had suspended the well
    for further evaluation and testing
    after wireline logs identified two
    hydrocarbon-bearing zones at about
    3570m and 3325m.
    Meanwhile, initial testing of
    Origin and AWEs Redback South-1
    produced gas flows at rates of up to
    38.4 million cubic feet per day.
    While Origin said the commercial
    value of the find would not be known
    until further analysis, it noted the
    flow rates indicated the excellent
    reservoir quality of the upper Wagina
    sandstone.
    Jingemia-12, in the Jingemia
    oil field in which Norwest holds a
    small interest, intersected a 15m
    hydrocarbon column in the Dongara
    sandstone and was cased and
    completed by operator Origin in
    August last year.
    Munachen said that although
    Jingemia-12 came onstream late
    in 2009, it had not contributed
    its maximum potential due to
    engineering problems. When it
    becomes fully operational it has the
    potential to add up to 400 barrels
    of oil per day to production at the
    Jingemia field, which currently
    produces 650bpd.
    So even if we have a meagre
    1.278 per cent, it is valuable.
    Munachen also noted that
    development options for any
    discoveries would depend on the size
    of the find, though he noted that there
    was a ready market in Geraldton,
    which is just to the north of the
    permits.
    He said that any major industrial
    activity like the Okagee port and rail
    project, which includes a steel mill,
    would lead to the development of a
    whole service industry and that all
    these would need energy.
    That is an opportunity to
    capitalise on.
    Norwest also has assets in the
    Timor Sea and in southern England.
    In Australian Timor Sea waters,
    Norwest holds a 1.25% overriding
    royalty interest in the Puffin oil field.
    Munachen said the company was
    confident of the value of this asset
    and while production at the field was
    currently stalled, the interest was
    recently valued at about $15 million.
    It costs Norwest nothing to hold
    the interest and gives it exposure to
    future production and upside, he
    said.
    In England, Norwest holds three
    adjacent permits, PEDL 089, PEDL
    238 and PEDL 239, in Dorset and the
    Isle of Wight.
    PEDL 238 and PEDL 089 are
    just north of BPs giant Wytch Farm
    oil field, which has produced more
    than 400 million barrels of oil, while
    preliminary work has indicated that
    deep basement-involved geologic
    structuring is highly prospective
    beneath PEDL 239 in the Isle of
    Wight.
    While the north Perth Basin is a
    company-maker, the Wessex Basin
    can be a monumental companymaker,
    Munachen said.
    The Wessex Basin geology is
    quite complex. But we do have a good
    position there C we are the operator.
    The work we have done to date is
    extremely encouraging.
    With the period of repositioning
    now complete, the year ahead
    promises to be a time of opportunity
    for Norwest with a number of clearly
    defined projects to drive shareholder
    value. C Bevis Yeo
    NORWEST ENERGY
    AT A GLANCE
    HEAD OFFICE
    Ground Floor
    288 Stirling Street
    Perth WA 6000
    Australia
    Tel: +61 8 9227 3240
    Fax: +61 8 9227 3211
    Email: [email protected]
    Web: www.norwestenergy.com.au
    DIRECTORS
    Michael J Fry, Henry David Kennedy,
    Peter Lawson Munachen
    Market Capitalisation
    $A17 million (at press time)
    MAJOR SHAREHOLDERS
    Paticoa Nominees Pty Ltd
    4.7%
    Merrill Lynch (Australia) Nominees
    Pty Limited 3.96%
    Kirke Securities Ltd 3.06%
    Comsec Nominees Pty Ltd 2.67%
    The north
    Perth Basin off
    the Western
    Australian coast
    MARCH/APRIL 2010 RESOURCESTOCKS
 
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