Santos Limited announced today that record 1997 gas discoveries in Queensland by the company and its joint venturers now give the parties in Queensland very significant uncommitted gas available for sale.
The increased gas reserves, mostly located in South West Queensland, resulted from an exploration program of 35 wells, costing the joint venturers a total of $72 million. A success rate of 77% was achieved.
Total gas discoveries in Santos Queensland acreage last year exceeded 850 petajoules (PJ). In addition to the 650 PJ of gas reserves added in the Barrolka Complex (announced in November), a further 200 PJ of gas was discovered in South West and Central Queensland. The total gross proved and probable gas reserves in Santos Queensland acreage were a record 2600 PJ at the end of the year.
In addition to the three gas fields discovered in the Barrolka Complex (Beeree, Coolah and Barrolka North East), there were 10 other gas fields discovered. These included Costa Central, Wackett South Flank and Vega.
Santos Managing Director, Mr Ross Adler, said:
We are very pleased that our commitment to Queensland is producing such good results.
In November we announced that the gross hydrocarbon reserve additions from 1997 Queensland exploration (from the Barrolka Complex) would be at least 115 million boe. In the event that total Queensland booking is 160 million boe, almost 40% higher. Including these reserves, Santos estimates there is now over 1500 PJ of gas in its acreage available for commitment to new contracts.
The discoveries result from the use of new technologies, together with the expanded exploration program we are undertaking in response to market opportunities.
These reserves provide Queensland with considerable security in future gas supply, as well as providing the opportunity to supply new projects with gas. This will contribute to economic growth, employment and royalty payments.
Total potential royalty payments over time from uncontracted reserves are estimated to be over $300 million.
Accordingly we are actively pursuing opportunities for further gas contracts in Queensland. Cooper Basin gas has already been proven to be attractive to major customers in the State.
We are also aiming for further increases in reserves. In 1998 the joint venturers intend to spend a further $60 million gross on gas exploration in Queensland. This will involve the drilling of 21 wells.
The joint venturers produced 62 PJ of gas in Queensland last year. Supply of gas from South West Queensland to Brisbane commenced in 1997 and supply to Mt Isa is scheduled to commence this year.
Santos and its joint venturers first discovered gas in South West Queensland in 1969 but it was not until 1994, 25 years later, that the first major sales were made.
South West Queensland gas reserves have a competitive advantage over other possible gas sources because they are located in an area with existing field infrastructure and are connected by pipeline to Brisbane, Gladstone and Mt Isa.