10/30/2019 | Press release | Distributed by Public on 10/30/2019 22:25
DENVER, COLORADO USA, BRISBANE, QUEENSLAND AUSTRALIA and VANCOUVER, BRITISH COLUMBIA CANADA - 30 October 2019 (Pacific Time - Canada) (TSX-V:SXE) (ASX:SXA)
The directors of Strata-X Energy ('Strata-X' or 'Company') are pleased to announce that following a competitive tender process, the Honourable Annastacia Palaszczuk MP, the premier of Queensland announced the Company and Real Energy Ltd ASX:RLE ('Real') as preferred bidders for the Queensland Government's tender for acreage (PLR2019-1-11, see map) in a 50:50 Joint Venture, termed 'Project Venus'. Strata-X and Real have invested considerable time in securing this highly prospective Coal Seam Gas (CSG) acreage for nil consideration.
Project Venus is located within the main Walloon CSG fairway in the Surat Basin, Queensland. It is immediately adjacent to gas infrastructure and is prospective for CSG over its complete area of 153km2. A third party independent assessment by Adavale Energy, estimated that PRL2019-1-11 contains a gross Original Gas In place of 1,110 PJ (1.052 TCF). This estimate is based on data from CSG and conventional wells within and around the acreage, including a fully cored well within the acreage which had coal seams with gas contents of up to 13 cubic metres per tonne.
Real and Strata-X will be forming a 50:50 joint venture for 'Project Venus' where Real will be the administrative and commercial operator while Strata-X, at least for the initial phase to predictable reserves certification, will be the technical operator. Mr Ron Prefontaine is the Executive Chairman of Strata-X and was the technical Director of Arrow Energy and founding Managing Director of Bow Energy, two ASX-listed CSG companies that were separately taken over in 2010 and 2011, respectively, for a combined total of ~A$4 billion.
Once the permit is awarded, the joint venture plans to immediately commence a field program to prove commercial gas flows - a required precursor to predictable reserves certification.
More information on the Surat Basin can be found here:
Mr Prefontaine stated. 'Having run successful exploration and reserves programs in the Walloon CSG fairway previously, I know what is required to convert the vast prospective resources in PR2019-1-11 to reserves. Once material reserves are proven, given the nearby pipeline and infrastructure, our goal is to fast track field development to create early cash flows. We are planning to commence field work early in the second quarter of 2020 and our immediate focus will be to prove commercial gas flows which is a required precursor to predictable reserves certifications. In executing on this plan, Strata-X is very pleased to have Real as its partner'
Real Energy's Managing Director Scott Brown added: 'We are delighted that the Queensland Government has selected our Joint Venture as the preferred bidders for this block. It illustrates the quality of our tender and the confidence that the government recognise in our collective expertise we bring to developing this asset into another successful Queensland CSG field. This is high quality gas acreage and we see tremendous potential of this significant gas resource. We look forward to working collaboratively with Strata X to develop Project Venus.'
About Real Energy Corporation
Real Energy is an oil and gas company with a focus on the Cooper Basin, Australia's most prolific onshore producing petroleum basin, and the Surat Basin in Queensland. Real Energy has 100% ownership in 2 large permits in Queensland - ATP 927P & ATP1194PA, and a 50:50 JV with Strata X Energy Limited (ASX: SXA) to develop the 153km2 PLR2019-1-11 permit in the Surat Basin as another Coal Seam Gas project.
Strata-X is a Denver, Colorado (USA) based company and is engaged in the business of oil and gas exploration and development with a variety of exploration opportunities in the States of California and Illinois in the United States of America and the Republic of Botswana. Strata-X has 89,538,318 common shares outstanding and trades under the symbol 'SXE' on the TSX-V and 'SXA' on the ASX.
For Further information please contact:
|Tim Hoops (USA)|
The geological information in this announcement relating to geological information and resources is based on information compiled by Adavale Energy Pty Ltd, a technical consultancy with a focus on delivering integrated technical, project management and business development services for the petroleum industry. The information contained in this release pertaining the area PLR2019-1-11 Prospective Resources estimates are based on, and fairly represent, information prepared under the supervision of Dr Steven Scott, Managing Director of Adavale Energy Consultants. Dr Scott is a qualified petroleum reserves and resources evaluator. The information related to the results of drilled petroleum wells has been sourced from the publicly available well completion reports.
(1)Prospective and Contingent Resources figures are from an audit report prepared by Timothy Hower of MHA Petroleum Consultants, a qualified independent reserves auditor, dated and effective 10 May 2019 following MHA's audit in accordance with the COGE Handbook of the available technical data including the geological interpretation, information from relevant nearby wells, Company drilled wells, analogous reservoirs and the proposed program for the Project, prepared and presented to MHA by Strata-X. Tim Hower is a member of the Society of Petroleum Engineers and has consented to the resources estimates in the context they appear. Stated Prospective and Contingent Resources are based on, and fairly represents, information and supporting documentation prepared and/or audited by, or under the supervision of Timothy Hower. Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development project. Prospective Resources have both an associated chance of discovery and a chance of development. A high level of uncertainty exists with the Prospective resources given the lack of historical drilling, available data and other productivity factors that limit the economic viability of coal seam gas deposits. The reports Prospective and Contingent Resources are over Prospecting Licenses Strata-X holds for methane production the Republic of Botswana. Actual sales from the Prospecting License cannot begin until converted by Strata-X election and environmental filings to the Republic of Botswana. Stated Prospective Resource figures are Best Estimate estimated using deterministic method - unrisked, undiscovered natural gas quantities and net of a royalty and are shown at a 100% working interest in the Project and are derived from coal characterization data from the 19B-1 well comprised of 10 net metre of coal, gas saturation yields of 120 cubic feet per ton, coal density of 1.7g/cm and using a 75% recovery factor. Stated Contingent Resource figures are Best Estimate - natural gas quantities and net of a royalty and are shown at a 100% working interest in the Project and are derived from coal characterization data from the 19B-1 well comprised of 10 net metre of coal, gas saturation yields of 120 cubic feet per ton, coal density of 1.7g/cm and using a 75% recovery factor. Contingent Resources stated are estimated using low, best and high analytical inputs, using deterministic method. Contingent Resources were extrapolated over an area of 15km2 using the coal characterization of the 19B-1 well which area assumes consistent coal characterization as seen in the 19B-1 well over this area. Contingent Resources stated are prevented from being reserves until sufficient production tests are carried out and to date these tests have not been carried out. The total costs associated with establishing the commerciality of this project are unknown at this time given the early stage of the Project's development. There is no certainty that any portion of the Prospective Resources will be discovered, if discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. The 19B-1 well is located at Long22.9541/Lat-22.1804 and the fully cored historical Botswana government well named ML-1 is located at Long 25.9299/Lat-22.1793.
(2) Disclosures for Project Venus:
LR 5.25.1 - The Prospective resources are reported as at 8 August 2019
LR 5.25.2 - The petroleum resources are Prospective resources - natural gas.
LR5.25.3 - There are currently no reserves in the permit. Estimates for OGIP or Prospective Resources have not been adjusted for development risk
LR 5.25.5 - The Prospective resources are reported as Strata-X share or 50% unless otherwise noted as gross or 100%.
LR 5.25.6 - The probabilistic method was used to estimate Prospective Resources in PLR2019-1-11. The probabilistic method is based on assigning a statistical distribution to each of the various parameters of the volumetric calculation of recoverable hydrocarbons (in this instance gas) and varying them in a Monte Carlo simulation.
LR 5.28.1 - The Prospective Resources estimate is based on best estimate
LR 5.28.2 - Cautionary Statement: The estimated quantities of petroleum that may be potentially recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable hydrocarbons. Prospective Resource assessments in this release were estimated using probabilistic methods in accordance with SPE-PRMS standards.
LR 5.35.1 - The Prospective Resources are reported for the area PLR2019-1-11 in the State of Queensland.
LR 5.35.2 - The existence of a significant moveable hydrocarbons are determined by the results of previous petroleum wells in and around the permit area and the flow of gas to surface from these wells.
LR 5.35.3 - The changes of the Prospective Resources being converted to a higher PRMS designation (i.e. contingent resource or reserves) is high and there is a high degree of confidence in leading to development status however there are the usual risks associated with a gas resource of this type- see Cautionary Statement above.
LR 5.35.4 - NA
LR 5.41 - The Prospective Resources are prepared by Adavale Energy Pty Ltd, technical consultancy with a focus on delivering integrated technical, project management and business development services for the petroleum industry.
LR 5.42 - The information contained in this release pertaining the area PLR2019-1-11 OGIP estimates are based on, and fairly represent, information prepared under the supervision of Mr Steven Scott, Managing Director of Adavale Energy Consultants. Mr Steven Scott is a qualified petroleum reserves and resources evaluator within the meaning of the ASX Listing Rules and consents to the inclusion in this release of the contingent resources and prospective resources estimates related information in the form and context in which that information is presented.
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