THE proposed conventional gas drilling project near Nangwarry could potentially have a value of more than $450m, according to new figures released yesterday.
The figure was announced as the Lakes Oil NL takeover offer of Rawson Oil and Gas Limited closed earlier this week.
Lakes Oil will now work closely with Rawson in planning for, funding and managing the near-term drilling of the Nangwarry-1 well.
The news comes as the Limestone Coast Protection Alliance questions why the fracking moratorium is yet to gain passage through the State Parliament’s Legislative Council.
The proactive environmental group also warned petroleum companies were trying to gain a “foothold” in the region to expand drilling operations.
In a statement to the Australian Stock Exchange, Lakes Oil revealed the potential economic worth of the Nangwarry-1 prospect.
“The Nangwarry prospect holds a best estimate unrisked recoverable 57 billion cubic feet of gas, with a value of over $450m at a conservative $8 per gigajoule selling price,” Mr Tonkin said in the statement.
“The well is located within an established hydrocarbon province in the South Australian portion of the highly-prospective onshore Otway Basin and is in close proximity to existing gas pipeline infrastructure.”
According to Lakes Oil, the well is located in a jurisdiction that not only encourages petroleum exploration, but is also assisting with funding of the well through a $4.9m grant under the South Australian Government’s Plan for Accelerating Exploration (PACE) scheme.
“Lakes Oil’s strategy to diversify its portfolio of exploration opportunities has reaped early gains with the acquisition of Rawson,” Mr Tonkin said.
“The company will in the near term focus on delivering value from the diversified assets while continuing to seek a solution to the Victorian impasse.”
Limestone Coast Protection Alliance chair Angus Ralton yesterday questioned why the 10-year fracking moratorium had not passed through the upper house.
“We question why there is a hold up,” he said.
“As of yesterday, we still do not have the moratorium in legislation – the proof is in the pudding.”
Meanwhile, Mr Ralton said the alliance remained steadfast against the roll-out of new gas drilling projects in the region.
“Agricultural and horticulture must come first,” the environmental leader said.
“The two industries cannot co-exist.
“The gas industry is trying to get a foothold in the South East.
“It is like a Trojan Horse trying to move into our pristine area.”
He warned little of the money generated from gas mining would remain in the region.
Rawson has indicated it hopes to bring new gas to the South Australian market within two years from the Nangwarry-1 prospect.
