2014 good oil conference presentation€¦ · open hole dst testing failed twice due to plugging...
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Ground Floor
39 Stirling Highway
Nedlands WA 6009
T: + 61 (08) 6389 0322
F: + 61 (08) 6389 0697
9 September 2014 The Manager The Australian Securities Exchange The Announcements Officer Level 4/20 Bridge Street SYDNEY NSW 2000 Dear Sir
2014 GOOD OIL CONFERENCE PRESENTATION We attach herewith copy of presentation to be made at the 2014 Good Oil Conference by Key Petroleum Limited Managing Director, Mr Kane Marshall on 9 September 2014.
Regards IAN GREGORY Company Secretary KEY PETROLEUM LIMITED
Ground Floor
39 Stirling Highway
Nedlands WA 6009
T: + 61 (08) 6389 0322
Company Overview
and 2014-2015 Exploration Strategy
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Key Petroleum Limited
Key Petroleum Ltd is focused on wildcat drilling and exploration in both
the North Perth and Canning Basins in Western Australia. Both have
proven petroleum systems with the potential for conventional and
unconventional oil and gas opportunities.
Strong management team able to move quickly on new venture and business
opportunities.
Experienced technical specialists capable of identifying, maturing and generating prospect
potential.
Proven Operator and emerging operating oil company with strategic industry partnerships,
drawing on experienced professionals and a “lean and mean” attitude.
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Share Price
Share price movement to 29 August 2014
Source: Yahoo Finance
Company Overview
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MANAGEMENT AND STRATEGY
Corporately focussed board and hands-on management
Cornerstone investment with ASF Group Limited to unlock
value in financing exploration projects
Capital focus on Australian oil and gas projects
Intensive exploration campaigns planned in Western Australia
for 2015 and beyond
High equity positions and Operatorship in all acreage
FINANCE
Cash position of over AU$3 million
Managed low overheads and high equity positions in all
permits
Company has maintained a cash balance of over AU$3
million with minimal dilution to shareholder value
Flexibility to obtain future capital from Asian markets through
alliance with cornerstone investor
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Holds equity in, and Operates, over 5 million acres in permit portfolio –
Perth and Canning Basins.
Active Operator – exploration wells in 2013 and 2014 in addition to
conducting geochemical surveys.
Strategically positioned acreage close to infrastructure ports and towns
in known gas provinces.
Shallow targets and market proximity in currently mapped prospects
may result in relatively low development costs in event of an oil
discovery.
Advantageous WA domestic and industrial gas demand (coastal towns
and mining communities).
Commercial export and offtake possible from NW towns e.g. Broome or
Derby for potential conventional or unconventional discoveries.
Exploration Outlook
Hands-on management and experienced professionals at Key Petroleum
Strategic Focus 2014-2015
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Pursue an intensive 2015 wildcat drilling program for both conventional oil and gas prospects
in WA’s remote Canning Basin.
Undertake planned workovers of an existing production facility and discovery wells within
Key’s permit portfolio including flexibility for future production testing at Dunnart-2.
Become a producer through oil and gas exploration opportunities in Perth and Canning Basin
interests.
Pursue new venture opportunities in other basins to provide a diversity of risk and prize size.
Exploit new exploration methods (modern seismic reprocessing and geochemical survey
techniques) to increase quantity of subsurface data for prospect generation and drillable
targets.
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Portfolio – Current WA Interests
Onshore Canning Basin
Onshore Perth Basin
Canning Basin has the largest estimated
shale-gas resource in Australia up to 235
trillion cubic feet and is the largest undrilled
sedimentary basin in WA.
Over the past 10 years, 11 new commercial oil
and gas fields discovered in the Perth Basin.
Source: WA Department of Mines and Petroleum
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Portfolio and Forward Looking Programs
Permit Location Interest Acreage (acres) Operator
EP448 Canning Basin 78% 2,000,000 Key Petroleum Ltd*
EP104 Canning Basin 54% 180,000 Key Petroleum Ltd*
R1 Canning Basin 65% 60,000 Key Petroleum Ltd*
L15 Canning basin 61% 40,000 Key Petroleum Ltd*
L12-10 Canning Basin 100% 380,000 Key Petroleum Ltd*
EP437 Perth Basin 50% 400,000 Key Petroleum Ltd*
Forward Drilling Program 2014-2015 (subject to farmin)
EP437 possible production test at Dunnart-2 contingent on final petrophysical evaluation
Remediate R1 causeways to inspect Point Torment-1 and Stokes Bay-1 wellheads in preparation for well testing in 2015
Currently assessing other Canning Basin opportunities for drilling late this year through the wet season
Forward Exploration Program 2015 (subject to farmin, DMP and JV approval)
Drill Condor South-1
Drill Wye Knot-1
Drill Griffith-1
Stokes Bay Intervention program including testing
* via wholly owned subsidiaries
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EP448 - Exploration Campaign
Two shallow conventional drillable oil
prospects have been identified for drilling:
Four suitable prospects overall identified
in the north of the permit (Darriwell
Project) – Patterson, Griffith, Griffith
South and Griffith North.
An appropriate farmin partner is being
sought.
Shallow objectives mean drilling,
development and completion costs are
significantly less than unconventional
wells with shorter period for
commercialisation.
Prospects located a few hours drive from
Broome and Derby (able to
commercialise via export from ports and
refine in Singapore with premium based
prices).
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EP448 – Darriwell Project Technical Evaluation
Areal size of the Griffith Prospect Key identified an extension of the Willara Sub-basin to the south
adjacent to the Chirit Fault
Technical evaluation identified the southern part of the Canning in EP448 as being similar to that of the
Admiral Bay Fault Zone which had oil discoveries in the 1980’s.
Technical team identified an extension of the Willara Sub-Basin to the south, adjacent to prospects in
EP448 and Discrete Area L12-10.
The trough in this sub-basin is the main source for discoveries at Great Sandy-1, Nita Downs-1,
Cudalgarra-1 and Leo-1. The trough likely extends into the offshore Canning Basin acreage where
Phoenix-1 recently drilled an oil discovery.
Patterson and Griffith prospects assessed as most suitable structures for drilling with an estimated
unrisked prospective resource of recoverable oil at a best estimate of 30 and 14 million barrels.
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EP104 Trend - 2015 Exploration Campaign
The EP104 (EP104, R1 and L15) wet gas trend
workover program incorporates:
Remediation of causeways to Stokes Bay-1 and
Point Torment-1 in 2014.
Workovers of Stokes Bay-1, Point Torment-1
and West Kora-1 in 2015.
Drilling of additional Stokes Bay-1 prospect from
reprocessed seismic.
West Kora-1 (left) and Point Torment-1 (right) flaring
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EP437 - 2014-2015 Exploration Campaign
Operations at Dunnart-2 undertaken:
Live oil shows encountered throughout
Bookara Sandstone.
Live oil shows also in fractures in the
basement – potential for new large oil play
in the North Perth Basin and is being
assessed as part of the full evaluation and
any needs for production testing.
Well has been suspended with 7”
production casing and cemented for future
production testing.
Nine prospects identified within EP437
after remapping and technical evaluation
undertaken.
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EP437 - Dunnart-2 Drilling Operations
Key as Operator successfully drilled Dunnart-2 encountering live oil throughout the Bookara
Sandstone within budget.
Open hole DST testing failed twice due to plugging then a mechanical failure. FET Logging also
encountered a hydraulic failure of the tool.
The well was cased, cemented and suspended for future production testing.
Smaller rigs for both the completion string in Dunnart-2 and for drilling the shallower Condor South
prospect are currently being evaluated for follow-up activity.
Bookara Sandstone being evaluated by the wellsite geologist Bookara Sandstone saturated in oilFluorescence indicating oil in the Bookara Sandstone
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EP437 - Dunnart-2
DCA Rig 7 at night during drilling operations
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EP437 - Exploration and Prospectivity Review
The mapped Wye-Knot prospect
Exploration prospects identified from a Prospectivity Review include Wye Knot, Condor South and the
up-dip Wattle Grove.
Key is currently maturing the Condor South and Wye Knot prospects to drill ready status, including
preliminary investigations into a smaller rig that can drill both prospects and complete Dunnart-2.
The Wye Knot prospect is a three-way dip closed anticline
with a fault seal located ~10km west of the Mount Horner
oilfield up-dip from the Dongara oil and gas field.
Wye Knot has a best estimate prospective resource estimate
of 5 million barrels.
Drilling would assess the Jurassic, Triassic and Permian
oil objectives down-dip from the Wye-1 discovery well.
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Emerging aggressive oil explorer unlocking value for shareholders through drilling
prospects whilst running ‘lean and man’.
Rationalisation of equity interests via recent commercial transactions, in line with strategic
goals presented to shareholders.
Key has developed as an Operating oil company with an exploration program focussed on
the drilling of high impact prospects.
Development of Operating capabilities and technical resources have been fundamental in
placing the Company in a strong position to execute near-term drilling projects and
assessing other growth opportunities.
Pipeline of projects are being developed in parallel with current projects to ensure
continual drilling and corporate activities to maximise shareholder value.
Strategic Outlook
