Scotland's Warrego Energy Farms Out Western Australia Tight Gas Asset

Aberdeen-based Warrego Energy on Tuesday announced A$40 million farmout agreement with Dyas BV and Mazarine Energy BV for the appraisal and development of the West Erregulla tight gas field in Western Australia (WA).

Located onshore within the Perth Basin, West Erregulla has been assessed to contain an estimated 185 bcf of gas in place with a 3 tcf unconventional upside potential, the company said.

Following the completion of the agreement and the receipt of all regulatory approvals, the equity split will provide Warrego with 20%, Dyas 30% and Mazarine Energy 50% of the equity. 

As per the company, 3D seismic surveying will commence in 2014 followed by appraisal well drilling in 2015. Under the terms of the agreement Mazarine Energy will take over operatorship from Warrego following the completion of the appraisal program.

Under the terms of the agreement Mazarine Energy will take over operatorship from Warrego following the completion of the appraisal program.

Duncan MacNiven, Warrego Director, commented: "We are delighted that Dyas and Mazarine Energy have partnered with Warrego and become part of the emerging onshore Western Australian gas story. We look forward to working with our Dutch partners in the appraisal and development of West Erregulla. I have no doubt that their technical and commercial capabilities will add value and assist us in maximising returns from this exciting project."

Warrego won the rights to block EP469 in the Perth Basin following a competitive tender in 2008. The block, which contains the West Erregulla field, is located close to the two pipelines that supply the potential WA customer base.

With an estimated 185 bcf in place in the West Erregulla tight gas field and overlaying shale with 3 tcf potentially recoverable, Warrego remains confident of the future, the company said.

Warrego expects in the midterm that the JV may be well positioned to capitalise on the substantial shale resource within EP469, following recent successes in the shale by near neighbors AWE and Norwest.

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