Northern Territory Oil and Gas - La'o HamutukNorthern Territory Oil and Gas 2006 Department of Primary Industry, Fisheries and Mines 2006 HiGHLiGHTS 1. Every well drilled in 2006 encountered

Northern TerritoryOil and Gas

2006

Northern TerritoryGovernmentD E PA R T M E N T O F P R I M A R Y I N D U S T R Y, F I S H E R I E S A N D M I N E S

Northern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryNorthern TerritoryOil and GasOil and GasOil and GasOil and GasOil and GasOil and GasOil and GasOil and GasOil and GasOil and GasOil and Gas

2006

Northern Terr i tory Oi l and Gas 2006

Moshtak OthmanPetroleum Resource Manager

Mining & Petroleum Authorisations & Evaluations

Darwin, April 2007

dpifMdedicated professionalism, passion with purpose, individual

accountability, fun and celebrating success and Motivation to lead

ISSN 1834-707X

© Northern Territory Government April 2007

Northern Territory Oil and Gas 2006 �Department of Primary Industry, Fisheries and Mines

2006 HiGHLiGHTS

1. Every well drilled in 2006 encountered hydrocarbons at one or more levels. This is the highest number of discoveries in a given year in the Northern Territory.

2. TheDarwinLiquefiedNaturalGas(LNG)plantstarteditscommissioningphaseinlate2005andexporteditsfirstshipmentinmidFebruary2006.

4. In December 2006, the Darwin LNG plant announced its intention to increase production to full capacity (3.24Mtpa)fromthecurrentlevelofproduction(3Mtpa),whichisattheleveloftheoriginallycontractedsales.Approvals currently in place for the Wickham Point site are for 10 Mtpa of LNG production in two trains.

5. Approximately2.46MMTofLNGhavebeenexportedthrough39cargoshipmentssincetheplantcommencedproduction in January 2006.

6. Extensiveexplorationanddrillingprogramswereundertaken:

SixoffshoreexplorationwellsweredrilledatatotalcostofA$214.9million.Thedrillingofanothertwowellshadcommencedatyearsendandwascontinuingat thetimeofwritingof thisreport.Forcomparison, in2005,eightexplorationwellsweredrilled,atatotalcostofoverA$137million.Twelvegeophysicalsurveyswereconductedin2006,comparedtoonlytwo3Dseismicsurveysin2005.

7. Therewassignificantprogressinthedevelopmentofmoderatelysizedresources,withonenewproductionlicence awarded.

8. AfourthFloatingProductionStorageandOffloadingFacility(FPSO)isexpectedoverthePuffinoildiscoveryinJune2007.AfifthFPSOisunderconsiderationtodeveloptheSwift/Swallow/SkuaandMontaraprojects.

9. Two Field Development Plans with applications for new Production Licences are being assessed by theAuthorisationsandEvaluationsDivisionoftheNorthernTerritoryDepartmentofPrimaryIndustry,FisheriesandMines(DPIFM).

10.CoogeeResourceshascommittedtoamulti-milliondollarFrontEndEngineeringandDesign(FEED)studyforaMethanolFloatingProduction,StorageandOffloadingFacility(MFPSO),whichisplannedoverdiscovered,but stranded gas resources such as Cash Maple.

11.AcondensatestrippingprojectisplannedbyNexusovertheCruxgasdiscovery.DrillingofCrux-2commencedon30December2006toappraiseandcertifyreserves intheCruxfield.Drilling isstillunderwayat timeofwriting.

12. The Northern Territory Government attended several national and international petroleum conferences. The TerritorymaintainedahighprofileattheAustraliaPetroleumProductionandExplorationAssociation(APPEA)meeting and the South EastAsia andAustralianOffshoreConference (SEAAOC).Highlights included thefollowing:TerritoryopportunitieswereheavilypromotedattheAPPEAConferenceontheGoldCoast(7–10May2006).TheNorthernTerritoryChiefMinister,HonClareMartin,presentedakeynoteaddressontheimportanceofplacing downstream gas industry development on the national agenda.InajointventurewiththeInternationalInstituteofResearchforExecutiveDevelopment(IIRExecutiveDevelopment),theNTGovernmentorganisedthe12thSEAAOCConference,heldon18–21June2006atSKYCITY Casino, Darwin.The NT Chief Minister and the PNG Energy Minister, Sir Moi Avei, presented keynote addresses at SEAAOC.Otherhigh-levelspeakersincludedLauraSugg,theAustralianPresidentofConocoPhillips;BelindaRobinson,theChief Executive ofAPPEA; JohnHartwell, theHead ofResourcesDivision,Department of Industry,TourismandResources;JamesSlutz,DeputyAssistantSecretary,OilandNaturalGas,USDepartmentofEnergy;andJoeDesmond,theUndersecretaryforEnergyAffairs,CaliforniaResourcesAgency.

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Northern Territory Oil and Gas 2006 2Department of Primary Industry, Fisheries and Mines

SHORT-TERM fUTURE HYdROCARBON ACTiViTiES iN THE NORTHERN TERRiTORY

The following petroleum areas are administered by the NorthernTerritoryGovernment(figure �).

The level of activity planned to be undertaken in the nextfiveyearsrankstheNorthernTerritoryasaworld-class petroleum province.

Theseactivitiesincludethefollowing:

figure �. Petroleum areas in the Northern Territory.

Onshore area AminimumnominatedexpenditureofA$44.49millionhas been committed up to year 2011.

Northern Territory Adjacent Area A minimum nominated expenditure of A$205millionhas been committed up to year 2011. This includes the drillingof11wellsandtheacquisitionof2850linekmof2D and 300 km2 of 3D seismic data.

A R A F U R AS E A

G U L FO F

C A R P E N TA R I A

T I M O R S E A

I N D I A N O C E A N

EP69

NT/P64

NT/P63

NT/P62

NT/P68

NT/P65

NT/P67

NT/P66

NT/P48

NT/P61

NT/P61

NT/P55

NTC/PL1PL20

NT/P70

NT/P69

NT/P72

NT/P71

NT06-05

NT06-01

NT06-02 NT06-03

NT06-04

AC06-01

AC06-02

EP(A)140

EP104

EP103

EP98

EP76

EP99

EP93

EP97

EP112

EP82

EP118

EP125

EP117

EP(A)75

EP(A)138

EP(A)126

EP(A)92EP(A)129

EP(A)114

EP(A)136

EP(A)128

EP(A)132

EP(A)127

EP(A)130

EP(A)107

EP(A)106EP(A)124

EP(A)133

EP(A)115

EP(A)131

EP(A)91

EP(A)105

EP(A)111

EP(A)137

EP(A)120

EP(A)134

EP(A)113

EP(A)135

EP(A)142

EP(A)143

EP(A)141

NT/RL1

NT/RL3

AC/L2

AC/L5

AC/L1

AC/RL1

AC/RL3

AC/RL5AC/RL6

AC/RL4

NT/RL2

AC/L3

RL2OL3

OL5OL4

AC/RL8

RL1

NORTHERN TERRITORYADJACENT AREA

JOINT PETROLEUM

DEVELOPMENT AREA

ASHMORE &CARTIER ISLANDS ADJACENT AREA

JPDA 06-101AJPDA 06-103

Alcan Gove(Al)

Gemco (Mn)

Mataranka (Lime)

McArthur River(Zn, Pb, Ag)

Mud Tank(Vermiculite)

Callie(Au)

Frances Creek(Fe)

Union Reefs(Au)

Mt Porter(Au)

Redbank(Cu)

Merlin(Diamonds)

Maud Creek(Au)

Molyhil(W, Mo)

Juno(Au)

White Range(Au)

Nolans Bore(RE, P, U)

Harts Range(Garnet sands)

Oberon(Au)

Ranger(U)

Tiwi Mineral Sands(Zircon, Rutile)

Rustler's Roost(Au)

Tom’s Gully(Au)

Cosmo Deeps(Au)

Browns(Cu, Co, Ni, Pb)

Bootu Creek(Mn)

Peko Tailings(Au, Cu, Co)

Ag SilverAl BauxiteAu GoldFe IronCo CobaltCu CopperMn ManganeseMo Molybdenum

Ni NickelP PhosphatePb LeadRE Rare EarthsU UraniumW TungstenZn Zinc

OFFSHORE RELEASE AREAS 2006

OFFSHORE EXPLORATION PERMITS Ashmore & Cartier Island Adjacent Areas Northern Territory Adjacent Areas Joint Petroleum Development Areas Retention Lease

ONSHORE EXPLORATION PERMITS Applications

Granted

Production Licence / Retention Lease

LAND STATUS Aboriginal land

GEOLOGICAL REGIONS Younger basins

Crystalline basement

PRODUCING FIELDS

Oil field Abandoned oilfield

Gas field Shutdown oilfield

Oil and gas field

Gas pipeline Oil pipeline

Possible gas pipeline Floating production and storage offtake facilities

UNDEVELOPED DISCOVERIES

Oil discovery

Gas discovery

Oil and gas discovery

GREATER SUNRISE includes SUNSET, SUNRISE, LOXTON SHOAL, BARD and TROUBADOUR

MINERAL DEVELOPMENTS

Operating mine

Mine under feasibility study

ELEMENT ABBREVIATIONS

Bayu-Undan Gas Pipeline

McArthur River

Gas Pipeline

0 100 km

Borroloola

Yulara

Nhulunbuy

DILI

DARWIN

Kalumburu

Broome

AliceSprings

Tennant Creek

Jabiru

Oecusse

Katherine

Kupang

JPDA 03-12JPDA 06-102

JPDA 06-102

JPDA 06-102

B O N A PA RT EB A S I N

M c A RT H U RB A S I N

V I C TO R I A -B I R R I N D U D U

B A S I N

B E E TA L O OS U B - B A S I N

T RO U G H

L A N D E R

W I S OB A S I N

C E N T R A LG E O R G I N A

B A S I N

S O U T H E R NG E O R G I N A

B A S I N

A M A D E U S B A S I N

P E D I R K A /S I M P S O N D E S E RT /

E R O M A N G AB A S I N S

B A S I NN G A L I A

A R A F U R AB A S I N

S O U T H A U S T R A L I A

W E

S T

E R

N

A U

S T

R A

L I

A

Q U

E E

N S

L A

N D

W E S T T I M O R

T I M O R L E S T E

January 2007. Northern Territory Geological Survey. A06-080Appea.ai

MAJOR PETROLEUM AND MINING OPERATIONS OF THE NORTHERN TERRITORY

AC/P38AC/P35

AC/P8

AC/P4

AC/P4 AC/P24

AC/P33

AC/P17AC/RL6

AC/P30 AC/P36

AC/P21

AC/P32

AC/P34AC/P37

AC/P23

AC/P20AC/RL7

AC/P22

WEABER

PALM VALLEY

DINGO

MEREENIE

ABADI

LYNEDOCHBAROSSA

EVANS SHOAL SOUTH

CALDITA

EVANS SHOAL

ELANG / KAKATUA

BAYU-UNDAN

PROMETHEUS

TERN

PETREL

BLACKTIP

BARNETT

TURTLE

VIENTA

WAGGONCREEK

BULLER

KUDA TASI

CORALLINA

BUFFALO

LAMINARIA

AUDACIOUS

KATANDRA

JABIRU

CHALLIS/CASSINITALBOT

SWALLOWBILIYARA

TAHBILKCRUX

ARGUS

SWIFT NORTHPADTHAWAY

SKUAPUFFIN

VESTASWAN

CASH/MAPLE

TENACIOUSBRONTOSAURUS

OLIVER

CORNEA

SPARKLEBREWSTER

ICHTHYS

JAHAL

CHUDITCH

KRILL

HINGKIP

AC/P4

AC/P39

AC/L6

COMMITTED

COMMITTED

MONTARA

TOROSA

CALLIANCE

GREATERSUNRISE

Merlin Venture

Challis Venture

Jabiru Venture

Northern Endeavour


The Territory of Ashmore and Cartier islands Adjacent Area

A minimum nominated expenditure of A$220millionhas been committed up to year 2011. This includes the drilling of 17 wells and the acquisition of 200 line km of 2Dand1189km2 of 3D seismic data.

Objectives

The objectives of the Resource Management sectionofDPIFMistoprovideoilcompanieswithaframeworkfor the exploitation of hydrocarbons in a mannerthat maximises return to the NT community. This isachievedby:advisingonmattersrelatedtograntingandmaintaining petroleum titles in the Territory onshore areas andCommonwealthoffshorewaters;bymonitoringoilandgasproduction;andbyensuringthatoperatorsarefollowing the appropriate legislation and guidelines and goodoilfieldpractice.

pETROLEUM ACTiViTiES iN THE JOiNT pETROLEUM dEVELOpMENT AREA (JpdA)

Exploration, development and production activities in 2006

Kuda-Tasi-3drilledbyWoodsideinJPDA06-105Acreagerelease:JPDA06101AawardedtoMinzaOilandGasLtdJPDA 06-102 awarded to Petronas ConsortiumJPDA06-103awardedtoOilexConsortium

figure 2 shows titles awarded in the JDPA in 2006.First LNG shipment from Darwin LNG plant:February2006145.6 BSCF gas exported from JPDA to DarwinLNG plant in 2006

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petroleum production in 2006

Hydrocarbon production from the Joint PetroleumDevelopment Area is summarised in Tables � and 2.

pETROLEUM pROdUCTiON fROM NORTHERN TERRiTORY AdMiNiSTEREd AREAS

Theoffshorefields,Laminaria,Corallina,JabiruandChallis, continue to produce oil. Over the courseof 2006, a decline in oil production and a rise in water cut were the dominating features from these producing fields. Onshore, Mereenie continues toproduce oil. Mereenie and Palm Valley continue to supply the Northern Territory with gas for electricity generation.

Table � shows hydrocarbon production from Northern Territory and NT-administered waters from 1983to2006.

Oil

The Northern Territory’s offshore oil is produced from fourdifferentfields:Laminaria,Corallina,JabiruandChallis.Corallina,JabiruandChallis(seefigure �),continuetoproduceoilatanexpecteddecliningrate,due to natural depletion of the resource and a steadily increasing water cut. Laminaria was also expectedto follow this decreasing trend, but after certain mechanical problems were rectified, oil productionincreased from 1.685million barrels (MMbbl) in2005 to 2.320MMbbl. A total of 9.09MMbbl of oilwasproducedfromoffshoreresources in2006(seeTable �).

The Northern Territory’s total onshore oil production is producedfromtheMereeniegasandoilfield(figure 4).A total of 0.336 MMbbl were produced from Mereenie in 2006(Table �).

figure 2. Summary of titles awarded in the Joint Petroleum Development Area in 2006.

50 km0

JPDA 06-103

JPDA 06-102

JPDA 06-101A

V A C A N TTroubadour

Sunrise

Sunset

KELP DEEP

BAYU/UNDAN

CHUDITCH

KAKATUAELANG

BUFFALO

JAHULKUDA TASICORALLINA

LAMINARIA

126O00’ 128O00’

10O00’S

JOINT PETROLEUM

DEVELOPMENT AREA

ASHMORE &CARTIER ISLANDS ADJACENT AREA T I M O R S E A

I N D I A N O C E A N

W E S T E R N

A U S T R A L I A

TRUSCOTTSEABASE

Dili

Kupang

Oecusse

TIMOR LESTE

WEST TIMOR

DARWIN

Acreage leased prior to 2006

Acreage leased in 2006

Vacant acreage

Oil field

Gas field

Plugged and abandoned exploration well

Gas discovery

Gas condensate discovery

Oil and gas discovery

Oil discovery


Table 2. Summary of hydrocarbon production fromtheElangKakatua/KakatuaNorthfields.

Table �.SummaryofhydrocarbonproductionfromtheBayuUndanfield.

figure �. Summary of Northern Territory hydrocarbon production from offshore administered areas(1983–2006).

Propane2006Production (sm3)

Butane(sm3)

Condensate(sm3)

Raw gas(ksm3) Comments

January 82 754 355 180 950 427 February 70 079 314 164 838 009 March 79 975 350 942 944 735 April 78 244 339 868 949 606 May 81 957 348 222 990 665 June 72 788 311 223 881 220 July 81 911 349 778 975 742 August 80 865 349 994 960 370 September 77 728 335 988 914 521 October 84 928 364 614 975 355 November 79 556 345 095 928 586 December 80 982 350 386 943 693 Estimate only

Total 2006

99 461

85 377

99 081

96 008

99 711

89 107

101 734

96 320

92 336

101 365

93 298

95 189

1 148 987 951 767 4 115 454 11 252 929 Estimate only

0 –

506 280 3 447

1 472 715 10 323

1 416 220 13 475

1 623 404 14 228

1 852 327 14 038

1 909 851 13 360

1 672 913 13 411

1 684 975 12 834

1 691 006 13 270

1 603 405 12 340

1 452 898 11 734

16,885,994 132,460

Gas (m3)2006Production Oil (m3)

January

February

March

April

May

June

July

August

September

October

November

December

Total

Table �.Yearlyproductionofhydrocarbonsfromoffshoreandonshorefields(1990–2006).

0

5

10

15

20

25

30

35

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

OIL

PR

OD

UC

TIO

N (M

Mbb

l)

JABIRU CHALLIS SKUA LAMINARIA CORALLINA

Mereenie Jabiru Challis Skua Laminaria Corallina OFFSHORE TOTAL

0.000 0.000 0.000 0.0000.187 0.000 0.000 0.0000.835 0.000 0.000 0.0001.246 2.005 0.000 0.0000.941 7.620 0.000 0.0000.765 11.391 0.000 0.0000.631 15.126 0.535 0.0000.547 19.452 11.049 0.0000.514 9.977 12.109 0.2880.676 9.343 7.562 8.0450.838 4.169 5.066 5.5220.956 5.289 3.008 3.2491.018 2.777 4.596 1.9621.073 2.982 2.977 1.3510.886 3.719 2.291 0.0750.766 2.593 1.652 0.0000.614 2.568 1.312 0.0000.530 2.034 1.259 0.0000.469 1.705 1.164 0.0000.431 1.742 0.944 0.0000.407 1.652 0.921 0.0000.366 1.148 0.612 0.0000.366 1.049 0.625 0.000

198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006 0.336 1.110 0.493 0.000

0.0000.1870.8353.2508.561

12.15616.29231.04822.88725.62615.59512.50210.3548.3836.9715.0119.808

54.66343.86332.92919.56912.2679.4599.426

TOTAL 15.396 109.452 58.174 20.492

4.40329.88620.65316.2787.0633.0721.6852.320

85.360

0.91020.95419.87213.5349.5277.0705.7355.167

82.769

0.0000.0000.0002.0057.620

11.39115.66130.50122.37324.95014.75811.5469.3357.3106.0854.2459.193

54.13343.39432.49819.16311.9029.0939.090

356.247 371.643

OIL PRODUCTION (MMbbl)MERGROSS

0.0000.1250.6522.4614.9045.3476.7856.6117.3617.9359.450

10.49712.10613.71713.90414.20314.17516.54516.46917.45218.05717.69718.919

251.413

MERGINJ Mereenie Palm Valley TOTAL

0.0000.0000.2870.5421.6971.7602.2252.1583.4161.8143.4784.1582.8102.2262.6972.8132.4213.8054.7064.4393.6143.9263.720

61.030

0.0000.1250.3651.9193.2073.5874.5604.4533.9446.1215.9726.3399.297

11.49111.20810.91111.38712.55811.65212.86714.16113.77115.209

190.674

0.0290.5191.2591.8047.9288.0238.0438.3919.1478.4508.6878.4247.1486.2637.7247.2676.9816.0536.4306.2485.7185.2204.448

143.959

0.0290.6441.6243.723

11.13511.61012.60312.84413.09114.57114.65914.76316.44517.75518.93218.17818.36818.61118.08219.11519.87918.99119.657

334.633

GAS PRODUCTION (BSCF)


Gas

All of the Northern Territory’s onshore gas production is fromtheAmadeusBasin,southwestofAliceSprings.Therearetwoproducingfieldsinthebasin,MereenieandPalmValley. Virtually all of the gas produced is sold under long-term contracts to the NT Power and Water Corporation (PowerWater) through Gasgo for power generation.Palm Valley is operated by Magellan Petroleum and the MereenieoilandgasfieldisoperatedbySANTOS.

In2006,19657billionstandardcubicfeet(BSCF)ofgaswereproduced(figure �),asthetwofieldscontinuedtosupplytheTerritory’spowergenerationneeds:

Mereenieproduced15.209BSCFin2006 comparedto13.771BSCFin2005.PalmValleyproduced4.448BSCFin2006 comparedto5.220BSCFin2005.

In June 2006, Eni Australia and PowerWater signed a Sales and Purchase Agreement to supply gas from the Blacktipgasfield,startingfromthebeginningof2009.Theagreementistosupplyupto850PJofgasoveraperiodof25years.

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figure �.Yearlyonshoreproductionofgas(1983–2006).

ExpLORATiON

Extensive exploration activity occurred within theTerritory in 2006. The most significant activities arelistedbelow:

Nexus Energy acquired a voluntary 285km2 3D seismicsurveyovertheCruxgasdiscoverywithinAC/P23.ThecostoftheCrucis 3D seismic survey wasA$5.07million.Santos acquired a voluntary 3D seismic survey overandaroundNT/P48andtheEvansShoalgasstructure,intwophases:PhaseOne–“Fast-track”.Thissurveycommencedon 17 June 2006 and was completed on 11 July. Itcovered960km2andcostaboutA$28.0million.PhaseTwo – “Racetrack”.This survey acquired2086 km2 between 12 November 2006 and 7 December 2007 .

MethanolAustraliaconductedtwoseismicsurveys:600 line km of 2D seismic survey was acquired overNT/P68from2to10November2006.500km2of3DseismicsurveywasacquiredoverNT/P68

from9Septemberto31October2006.NationalOilandGasPtyLtdacquiredseveral2DseismicsurveysoverNT/P62,63,64,65,70,71and72:Crocodile Marine Seismic Survey, 796kmoverNT/P70wasacquiredfrom8–16October2006.Kurrajong2DMarineSeismicSurvey,3291.6linekmoverNT/P62,63,64,71and72wasacquiredfrom17Octoberto 16 November 2006. Sunshine 2D Marine Seismic Survey, 887.7linekm over NT/P65 wasacquired from 21 November to 01 December 2006. Karoon Gas Australia acquired an airborne magnetic survey over its West Australian title, which also extendedoverAC/P30.SweetpeaPetroleumPtyLtd(Sweetpea)acquired several 2D seismic surveys overonshorepermitsEP76,98and117intheBeetalooSub-basin.Atotalof689linekmwasacquired.The Caldita 3D seismic survey over NT/P61 and 69 was commencedby ConocoPhillips on 10 December 2006. A total of 4826 km2 is planned. The survey was still ongoing at the time of writing of this report. TheOliver3DseismicsurveyoverAC/P33 was commenced by Auralandia NL on 28 December 2006. A total of 128 km2wasacquired.Schwarzer3Dseismic survey commenced on 3 March 2007overAC/P4,17,24andAC/RL5and 6. The survey was still ongoing at the time of writing of this report.

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figure 4.YearlyonshoreproductionofoilfromtheMereeniefield(1990–2006).

0.000

0.200

0.400

0.600

0.800

1.000

1.200

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Oil

(MM

STB

)

0

2

4

6

8

10

12

14

16

18

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

GA

S P

RO

DU

CT

ION

(B

SCF)

PALM VALLEY GAS

MEREENIE GAS


ENViRONMENT

In August 2006, a minor leak was identified on theJabiru-1A subsea tree. The Department was advised that this leak had a uniform flow rate and consistedpredominantly of produced water with random amounts of gas and oil bubbles. Attempts to seal the leak were unsuccessful. Based on water surface observations,calculations estimated the discharge of oil to be a maximumrateof3litresperday.Asaresult, the leakwas considered tobeminorand judgedasextremelyunlikely to have a serious or long-term environmental impact. The Jabiru-1A wellhead was monitored on a daily basis without an observed increase in leakage rate.

The operator,CoogeeResources (AshmoreCartier)Pty Ltd (Coogee Resources) submitted a Jabiru-1Acontingency plan to the Department. This plan was implemented tomonitor theflow rateof the leakand tointroduce steps to assist in managing the loss of wellhead integrity.

On6December2006,measurementsconfirmedthatthe oil discharge rate had increased and the well was shut down. Coogee Resources is currently assessing its options, but it is likely that the well will remain shut down for several months.

pipELiNE ACTiViTiES

Bonaparte Gas pipeline design reviewA reviewof thepreliminarydesign for theBonaparteGasPipeline,whichwillsupplygasfromtheBlacktipfield to Darwin, was held in Brisbane in December.Representatives of the owner (Power and WaterCorporation),designconsultants,theprojectmanager,thenominatedpipelineoperator,DPIFMEnergyTeamand various other experts received an overview andkey milestone dates of the project and discussed anumber of issues, such as stress corrosion cracking, pipeline isolation and venting philosophy, tie-ins, gas quality, pipeline coating selection, and process flowdiagrams.

The DPIFM Energy Compliance group undertookextensive training in the areas of cathodic protectionsystems, pipeline defect detection, Australian Standard 2885andemergencyresponses.

dRiLLiNG

Anextensivedrillingcampaignwasundertakenin2006.Despite limited rig availability, operators drilled eight wellsinNTadministeredoffshoreareas(seeTable 4).Drilling operations at two of these wells were continuing at the time of writing of this report.

Wells drilled in Offshore areas in 2006

Swift North-1SwiftNorth-1wasdrilledbyCoogeeResourcesinAC/P34and was spudded on 17 January 2006. It reached a depth of 2570m on 7 February. The well intersecteda 23.0m oil column in the Rowan Sand Formation;this was tested and flowed oil at a stabilised rate of 489m3/day(3075bbl/day).Testresultsindicatedthatthe well had the potential of producing up to 7000 bbl per day.

Swallow-1 Swallow–1wasdrilledbyCoogeeResourcesinAC/P34and was spudded on 1 March 2006. It reached a depth of 2515mandintersectedoilintwoseparatezones:

PuffinFormation:3moilcolumn.PloverFormation:25moilcolumn.

Thewellwastestedandflowedoilandgasatstabilisedratesof735m3/day(4625bbl/day)ofoiland77000m3/day(2.72millionstandardcubic feet/day)ofgas respectively.Test results indicated that the well had the potential to produceoilatamaximumrateof5000barrelsperday.

Puffin-9Puffin-9wasdrilledbyAEDinAC/P22.Itwasspuddedon 11 March 2006 and reached a total depth of 3117 m.

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Swift North -1 AC/P34 Coogee Discovered oil

Swallow -1 AC/P34 Coogee Discovered oil in two zones

Puffin - 9 AC/P22 Discovered oil in two zones

Puffin - 7

AC/L6 Intersected oil column

Evans Shoal South -1

NT/P48

Santos Discovered gas in two zones

Barossa -1 NT/P69 ConocoPhillips Discovered gas in two zones.

Caldita - 2 NT/P61 ConocoPhillips Encountered gas column

Crux - 2 AC/P23 Nexus Encountered gas at two levels

Well Permit Operator Status

Jan – Feb 06

Mar – April 06

Mar – April 06

April – May 06

May – July 06

Jul – Dec 06

4 Dec 06 – Feb 07

30 Dec 06

Date

AED

AED

Table 4. Summary of drilling activity in 2006.


The well discovered a new oil accumulation in a separate faultcompartmentinthePuffingeologicalstructure.Oilwasencounteredintwodifferentzones:

6mintheUK1amember.3.8 m in the LK1a member.

Puffin-7Puffin-7wasadevelopmentwell thatwasdrilledbyAEDinAC/L6.Itwasspuddedon02April2006andreached a vertical depth of 2500m. The well wasdeviated and drilled horizontally through 650m ofthe reservoir sandstone, which is 10 m thick. The wellwastestedandflowedoilatastabilisedrateof9700bbl/day.

Evans Shoal South-1EvansShoalSouth-1wasdrilledbySantosinNT/P48.It was spudded on 27 May 2006 and discovered gas at twolevels:

intheElang/PloverFormation,theprimaryobjectiveof the well.intheFlamingoFormation,thesecondaryobjectiveof the well.

Wells planned to be drilled in 200�

Caldita-2,inthenorthernBonaparteBasin,drilledbyConocoPhillips inNT/P61,wascompletedon8Feb2007.Crux-2,intheVulcanSub-basin,wasbeingdrillingbyNexusEnergy inAC/P23,at thetimeofwritingof this report.Puffin-8, inAC/L6,wasbeingdrilledat thetimeofwriting of this report. Sweetpea is planning to drill 8 to 12 wells in the onshoreBeetalooSub-basin.

pETROLEUM dEVELOpMENT, MAJOR pLAYERS ANd pROJECTS

The Petroleum Development unit in the Trade and MajorProjectsDivision(formerlytheOfficeofTerritoryDevelopment)of theDepartmentof theChiefMinisterisresponsibleforthefacilitationofmajorgasresourceprojects in the Northern Territory and the Timor Seaarea,suchas:

expansionofLNGproductionthe establishment of gas-based manufacturing, such as petrochemicals, fertilisers and gas-to-liquidspotential gas supply to markets in southeastern Australia.

Eni Australia (Eni)

SincethediscoveryoftheVestaoilfield,Enihasbecomeoneofthemajorplayers intheNorthernTerritory.TheVesta discovery was followed by the acquisition of the Pantheon HD3D Seismic Survey, the acquisitionof Woodside’s equity in the Blacktip gas field, andmore recently, by the signing of a Sales and Purchase Agreement with the PowerWater to supply the Northern Territory’sgasneedsfor25years.

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Blacktip gas fieldThe Blacktip gas field is located in the southeasternBonaparteBasininexplorationpermitWA-279-P,300kmsouthwest of Darwin and 100 km west of Wadeye. Currently, EniAustraliahas100%equity inBlacktip. InJune2006,Eni Australia and the PowerWater signed a Sales and Purchase Agreement to meet the Territory’s long-term gas requirementsfrom2009.

Australian Energy developments (AEd Oil Limited)

Puffin oil field developmentAEDOilLimitedappliedforaProductionLicencetoproduceoilintwophasesfromthePuffinstructure.Theproductionlicence(AC/L6)wasawardedandthecompanyismodifyingatanker(theGerrita)tobecomethefourthFPSOoperatingin Northern Territory-administered waters.

Since its formation, the Company has experiencedconsiderable growth, as illustrated by the following 2006 highlightsofthePuffinproject:

Puffin’s published P50 reserves were upgradedfrom 11.6 MMbbl to 14.7 MMbbl.A multiple-level oil discovery in the Puffin-9explorationwellwasannounced,with6mand3.8moil columns in the UK1a and LK1a sandstones,respectively.Puffin-7intersectedhydrocarbons.Oil Initially In Place (OIIP) of 90MMbbl for thePuffinNorthregionwasannounced.Reserveswereestimated to be in the order of 40 MMbbl from the Reservoir simulation. Puffin South West regionalsoshowsconsiderablepotential, subject to finalreserve calculations.Puffin-8wasspuddedon17February2007.Shortly after the completion of Puffin-8, theinstallationofaflowlinesupportbase,subseatrees,flowlinesandariserisexpectedtocommence.In June 2007, the FPSO is scheduled to beconnected,testedandcommissioned(firstoil).

OMV Australia

TheOMVAustraliagroupofcompanieshasinterestsinthefollowingoffshoreExplorationPermitsandRetentionLeasesadministeredbyDPIFM(Table �):

OMVTimorSeaPtyLtdholdsa100%interest intheTenaciousoilpoolinRetentionLeaseAC/RL4anda50%interestintheTenaciousoilpoolintheadjacent AC/RL5 Retention Lease. Cosmo OilAshmoreLtdholdstheremaining50%interest inAC/RL5.CosmoOilAshmore Ltd, CosmoOil Co, Ltd andOMVTimorSeaPtyLtdhold35%,15%and50%interests, respectively, in the Audacious oil pool withinRetentionLeaseAC/RL6.

During2006,RetentionLeaseAC/RL6wasgrantedforafive-year term,effective from21July2006.AC/RL6was previously part of the Audacious Location in ExplorationPermitAC/P17andcontainstheAudacious-1oil discovery.

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Technical work aimed at commercialising the TenaciousandAudacious-1oilpools(inAC/RL4and5,andtheoilpooldiscoveredbyAudacious-1inAC/RL6)was conductedduring the year.No field developmentactivities were carried out during 2006.

AC/P4, AC/P17, AC/P24 and AC/RL6The AC/P4, AC/P17, AC/P24 and AC/RL6 JointVenture partners have agreed to acquire the Schwarzer 3D survey over these permits. The newsurvey will be acquired in the dip direction, with sail lines trending northwest to southeast, and will cover an area of some 680 km2. The survey was underway at the time of writing. It will overshoot a portion of the Onnia regional speculative 3D dataset, acquired byPGSin1999–2000.

AC/RL4, AC/RL5 and AC/RL6In addition to the new 3D seismic data to be acquired by theSchwarzersurveyoverAC/RL6,anticipatedactivitiesfor2007 will be to continue technical and commercial studies aimed at commercialising the Tenacious and Audacious oil pools.

Nexus Energy

AC/P23The AC/P23 permit includes the Crux gas/condensatefield,discoveredin2000(figure 6).Thisfieldisestimatedto contain mean recoverable gas reserves of 1.3TCFwithaGasCondensateContent (GCC)ofapproximately30bbl/mmscf, giving recoverable condensate reservesof48 mmstb.

TheCrucis 3D Surveywas acquired between 15December2005and9March2006,covering285km2 (134km2withinAC/P23).

Seismic data processing commenced on 11 January 2006andwascompletedon9June2006.

FEED studies are currently active, with firstproductionscheduledfor2009.

The Crux field will be developed initially as a gasrecyclingproject,usinganFPSO,withtwoproducingwellsandthreegas injectionwells.Plateauproduction rate isanticipatedtobe16000stb/d.

Woodside

Woodside is oneof themajor players in theTerritory.Woodside’s activities cover both exploration andproduction. ItoperatestheNorthernEndeavourFPSOin AC/L5 over the Laminaria/Corallina oil structures.These fields are experiencing declining oil productionassociatedwithahighwatercut(nowaveragingaround80%). This has been expected, due to excessiveproduction in the last few years leading, to oil production peaking at over 180 000 barrels per day at times. Activitiesovertheareaaresummarisedbelow:

A seismic study was conducted to investigate the technical feasibility of a seismic survey over Laminaria/Corallina, as part of a possible multi-azimuthacquisitionprogram.Aseismicfluideffectis expected, but the magnitude, compared to theexpected noise level, may make this difficult to

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figure 6.SchematicdiagramshowingdetailsofproposedproductionwellsintheCruxfield

Table �.OMVAustralia’sinterestsandjoint-venturepartnersin NT offshore tenements.

AC/P4 OMV Timor Sea 35% Yes Cosmo Oil Co Nippon Oil Exploration (Australia)

AC/P17 OMV Timor Sea 35% Yes Cosmo Oil AshmoreNippon Oil Exploration (Australia)

AC/P24 OMV Timor Sea 60% Yes Avery ResourcesNippon Oil Exploration (Australia)

AC/RL4 OMV Timor Sea 35% Yes Cosmo Oil Co Nippon Oil Exploration (Australia)

AC/RL5 OMV Timor Sea 35% Yes Cosmo Oil AshmoreNippon Oil Exploration (Australia)

AC/RL6 OMV Timor Sea 35% Yes Cosmo Oil AshmoreNippon Oil Exploration (Australia)

Title Company Interest Operated Joint Venture partners


interpret. Ongoing work aims to reduce theuncertainties in interpretation.Subsurface studies to understand oil accumulation in the Laminaria South area were continued. A potential undeveloped accumulation was inferred from the Laminaria-3 and LPS1 appraisal well results. The Laminaria 3D seismic dataset was re-processed and the new dataset shows improved overburden and velocity structure. The need for possible additional PreSDM processing is currently being evaluated.The following annotated charts provide details of

the production performance of the Northern Endeavour frominceptiontodate(figure �),anddetailsfor2006(figure �).

Kuda TasiOperationsintheKudaTasi/Jahaloilfieldincludedthefollowing:

Kuda Tasi-3 was drilled to a depth of 3513mRT.SignificantlosseswereencounteredatTD(totaldepth).The FMI image log showed drilling-induced-tensile-fractures in the top of the Laminaria Formation.

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Corallina Laminaria Total Water Water Cut %

figure �.NorthernEndeavourreconciledproduction(kbbl/d)from1999to2006.

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Sm3

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Cor-3 SCM Leak

Low diesel stocks. Unable to bunker fuel due to weather & Cor-3 offline so no fuel gas

Lam-2 subsea GL choke opened by ROV

Laminaria field shutdown for Lam-2 flowline replacement

Laminaria field shutdown for Lam-2 tree replacement

Laminaria field shutdown for Lam-8 tree intervention

Cor-3 Hydrate

Production from Lam2,5 and 8, Cor3.

Problems kicking off Lam-5 after shut down

figure �. Northern Endeavour 2006 production performance.

The Kuda Tasi-3 appraisal well was designed to differentiate between the sub-economic/marginalbase case (7m oil column or less) and the highcaseeconomicup-side(18+moilcolumn).Thewellintersected the predicted stratigraphy, close to the prognosed top reservoir depth and was interpreted to contain a possibly oil-bearing sandstone at 3443mMD(3420mSSLAT).Pressuresof6ModularDynamicTool(MDT)pressurepointswereobtained.A lower permeability was interpreted, compared to otherKudaTasiappraisalandexplorationwells.Well results and their impact on potential future development are currently being evaluated.

Coogee Resources

CoogeeResources isoneof themajorplayers in theNorthern Territory, undertaking a range of petroleum activitiesthatincludesproduction,exploration,drillinganddevelopment.

Coogee Resources are the holders of AC/P32,AC/P34,AC/P20,AC/RL3, andAC/L1, 2, and 3. Thefollowing activities were completed during the 2006 Calendar Year.

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Northern Territory Oil and Gas 2006 �0Department of Primary Industry, Fisheries and Mines

DrillingTwo exploration wells were completed withinAC/P34during the year, Swift North-1 and Swallow-1. Bothwells have been suspended as possible oil producers, pending production licences.

Exploration ActivityAC/P32.Interpretationofthereprocessed(PSDM)Onnia3Dseismicsurveyandadetailedgeologicalstudy, including stratigraphic correlations and petrophysical analysis, is ongoing. AC/P34.Interpretationofthereprocessed(PSDM)Skua 3D seismic survey is ongoing and is targeting the Spruce Prospect.AC/P20.ApreliminarypetrophysicalreviewofCash-1and Maple-1 was completed.

Development ActivityAC/P34. The Swift-Swallow-Skua PreliminaryDevelopment Plan was submitted to Government for approval in October 2006. Detailed work iscontinuing on both the Swift-Swallow and Skua fields.TheDepartmentisassessingthePreliminaryField Development Plan and the first draft ofthe Joint Technical Paper was forwarded to the Commonwealth for comments and input.AC/RL3. The Montara Final Development Planwas submitted to Government for Approval in October 2006, along with an application for aproduction Licence. Detailed work is continuing. The Department is assessing the Final FieldDevelopment Plan and the first draft of theJoint Technical Report was forwarded to the Commonwealth for comments and input. The new Production Licence, AC/L7, was awarded on 20March 2007.

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Productionfigure � shows oil and water production from Jabiru and Challis from 1986 to 2006. figures �0 and �� show metered oil production from Jabiru and Challis, respectively, for 2006.

AC/L1. Jabiru field continued to produce oil andwater. Cumulative oil produced until the end of 2006 totalled109452MMbbl.AC/L3. Challis field continued to produce oil andwater. Cumulative oil produced until the end of 2006 totalled58174MMbbl.

pETROLEUM TiTLES

The Department administers petroleum titles in four different areas, three of which are offshore. The offshore areas include (a)Territorialwaters,(b)NorthernTerritoryAdjacentArea,and(c)TerritoryofAshmoreCartierIslandandAdjacentArea.

Onshore

The NT onshore area covers over 1.35 million squarekilometres of land (figures �2, ��), embracing severalprospective sedimentary basins; these include theAmadeus, Pedirka, Simpson, Eromanga, Georgina and McArthur basins and the Beetaloo Sub-basin. TwelveexplorationpermitsovertheAmadeus,Simpson,EromangaandGeorginabasinsandBeetalooSub-basinhavebeenawarded to local and international companies, including Sweetpea,TexaltaandCentralPetroleum.Thefirst of anumber of seismic surveys has been conducted and a very ambitious drilling program is planned by different operators in2007.Tworetentionleases(gasdiscoveries)andthreeoil and gas production licences are currently in place.

The production licences are in theAmadeus Basin.OL3actsoverthePalmValleygasfield,OL4and5act

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Jabiru Oil Challis Oil Water Production Watercut figure �.YearlyproductionofoilfromtheJabiruandChallisfieldsinkbbl/d(1986–2006).

Northern Territory Oil and Gas 2006 ��Department of Primary Industry, Fisheries and Mines

overtheMereeniegasandoilfields.Foractualproductionrates, refer to figures 4 and �, and Table �.

Thirty-fiveapplicationsarecurrentlybeingassessedpriortoawardingexplorationpermitsinonshoreareasofthe Northern Territory.

RL1 (Weaber gas field)DPIFMisundertakingpre-renewalnegotiationswiththeoperator, Advent Petroleum.

RL2 (Dingo gas field)TheDingofieldisamoderatelysizedgasdiscovery,withfour wells in the structure. Geological and stratigraphic

work is being undertaken by Santos as a part of licence commitments.

Offshore

Territorial Waters includes an area stretching three nautical miles from the Northern Territory coastline. Despite an increase in interest from several players, no titles are currently awarded in this area.

The Northern Territory Adjacent Area covers over 500000km2 between Territorial Waters and the International borders of Australia. This area is administered by the Department on behalf of the Commonwealth of

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01-Jan-06 01-Feb-06 01-Mar-06 01-Apr-06 01-May-06 01-Jun-06 01-Jul-06 01-Aug-06 01-Sep-06 01-Oct-06 01-Nov-06 01-Dec-06

m3

Jabiru Oil Production

A number of compressor trips

Turbine altenator problems

CDC operationsoffline for 4 days.

J1A shutin 30-

Planned maintenance work, offline for

figure �0.MeteredoilproductionfromtheJabirufieldfor2006.

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Ch-3 online following umbilical

Ch-3 offline for umbilical

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for 24 hrs

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following process

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Challis Oil Production

figure ��.MeteredoilproductionfromtheChallisfieldfor2006.


figure �2.OnshorepetroleumareasinthenorthernNorthernTerritory,asofMarch2007.

figure ��.OnshorepetroleumareasinthesouthernNorthernTerritory,asofMarch2007.

Australia.Fourteenexplorationpermitsandthreeretentionleases are currently granted and are operated by various national and international operators. The area contains world-class gas discoveries, such as the Sunrise, Evans Shoal,CalditaandBarossafields(figure �4).

NT/RL1 (Petrel gas field)The Petrel retention lease was renewed for another term on 10 July 2006. Conditions of the renewal include a commitment to undertake a 3D seismic survey in the third year of the term.


figure �4.OffshorepetroleumareasintheNorthernTerritoryAdjacentArea,asofMarch2007.

figure ��.OffshorepetroleumareasintheTerritoryofAshmoreCartierIslandandAdjacentArea,asofMarch2007.

NT/RL2 (Sunrise / Troubadour gas fields)The Sunrise/Troubadour retention lease is due forrenewal.DPFIMiscurrentlyassessingtheapplicationandisconductingnegotiationswiththeoperator(Woodside).

NT/RL3 (Barnett Oil discovery)DPFIM is currently negotiating with the operator,DrillSearch, regarding future drilling.

The Territory of Ashmore Cartier Island and Adjacent Area is a well known petroleum province in WAadjacentwaters (figure ��). It isadministeredbyDPIFMonbehalfoftheCommonwealthofAustralia.

All of the Northern Territory’s offshore petroleum is produced from this area and is delivered to three operatingFPSOfacilities.

The following extensive exploration and drillingactivitiesoccurredin2006:

Activities ranging from drilling, geological and geophysical studies, seismic acquisition, interpretation and commercial evaluations occurred on fifteenexplorationpermits.Work programs aiming to progress resource activities closer to the development phase occurredonsixretentionleasesoverhydrocarbondiscoveries.Oil iscurrentlyproduced through threeFPSOsonfourProductionLicences:

Northern Endeavour, producing from the Laminaria andCorallinaoilfields.JabiruVenture,producingfromtheJabirufieldChallis Venture, producing from the Challis and Cassinifields.

AfourthFPSOisexpectedovertheAC/L6Puffinoilfieldby June 2007.

Major projects in Territory of Ashmore Cartier island and Adjacent Area

The following new applications for retention leases are currently being assessed and negotiated with the Commonwealth Department of Industry, TourismandResources(DITR).

Argus (AC/RL8)A gas discovery in AC/P30 was madebyBHPBillitoninSeptember2000.Theresource is estimated at 1.5TCF andpossiblyupto6TCFofdrygas.AC/RL8was awarded over 10blocks on 9 Jan2007, with an appraisal well to be drilled in year 3 of the term.

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Crux (AC/P23)Crux is a gas discovery made by Nippon Oil in May2000. The resource is estimated to be in the order of 1.5TCFofgaswithina180m-thickgascolumn.Initially,the field will be developed as a gas recycling projectutilizinganFPSO toextract condensate from thegasand reinjectingdrygasback into the reservoir.Phasetwo is expected to be an LNG development. NexusEnergyisthecurrentoperatorofthefield.

Cash-Maple (AC/RL7)The current operator, Coogee Resources, made an application for a retention lease over 5blocks in the declared location. Thislease was awarded on 27 November 2006. Coogee has committed to a Front EndEngineering andDesign (FEED) study forthe development of Cash/Maple, usingMFPSOtechnology.

Audacious (AC/RL6)An application for a retention lease was madebytheoperator,OMVAustralia.Thisapplication covered one block over the Audacious oil discovery. This lease was awarded on 21 July 2006.

Talbot (AC/RL1)AnapplicationtorenewAC/RL1wasmadeby theoperator,HardmanResources.Therenewal was granted on 13 March 2006. ApacheOilAustraliaPtyLtdfarmedinandis the current operator of the lease.

Puffin (AC/L6)Australian Energy Developers (AED)presented a final field development plan(FFDP)ofthePuffinoildiscovery,togetherwith an application for a licence to produce oil in two phases. The company is modifying atanker(theGerrita)tobethefourthFPSOoperating in NT-administered waters.

An extensive drilling program withmultiple discoveries was undertaken in 2006. This consisted of drilling two development wells and an additional exploration wellover the Puffin structure. Puffin-9 and -7were drilled between March and May 2006. Puffin-9discoveredoilinbothitsprimaryandsecondary objectives. Puffin-8 is currentlybeing drilled.

TERRiTORY ACREAGE RELEASES iN 2006

North Eastern Bonaparte Basin

Area NT06-5Multiple bids for this area (figure �6)were received from highly recognised explorers.TheDepartmenthasassessed

applications and the successful bidder will receive anoffer.Theacreagehasthefollowingfeatures:

It is an under-explored area (no exploration wells),200 km from Darwin.It is 200km northeast of the Bayu–Undan gaspipeline.ItisincloseproximitytotherecentgasdiscoveryofCaldita(tested33mmscf/d).There is potential for hydrocarbon charge from the Malita and Calder grabens. TherearearangeofMesozoicplays,associatedwiththeLynedochBankFaultSystem.

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WA

NTQLD

NSWSA

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NT06-1 NT06-2

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Tuatara 1

Cobra 1Cobra 1A

Kulka 1

Money Shoal 1Chameleon 1

Torres 1

Tasman 1

Arafura 1

Goulburn 1

ASPD 5171-1

9°

132° 133° 134° 135°

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10°

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INDONESIA

AUSTRALIA200

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2006 Designated Frontier Release Area B

Bathymetry contour (depth in metres)

Petroleum exploration well - dry hole

Petroleum exploration well - oil and gas show

Petroleum exploration well - oil indication Petroleum exploration well - oil and gas indication

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Melville Island

Abadi

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Field outlines courtesy of IHS EnergyCaldita indicative only

NT/P69

NT/P70Lynedoch 1

Lynedoch 2

2006 Offshore Acreage Release Area B


Petroleum exploration well - dry holePetroleum exploration well - oil indicationExisting petroleum exploration

or production permit

Petroleum exploration well - oil and gas indication Petroleum exploration well - gas indication

Petroleum exploration well - gas showGas field

figure ��. Areas NT06-1, -2, -3 and -4 2006 acreage releases in the northernArafuraBasin.

figure �6.AreaNT06-52006acreagereleaseinthenortheasternBonaparteBasin.


BB

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Crane 1

Whimbrel 1

Ibis 1

Halcyon 1

Snowmass 1

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Sebring 1

Cassini

Challis

Jabiru

Nome 1

Douglas 1

Tancred 1Capricious 1

Turnstone 1, ST1Katandra 1, 1A

2006 Offshore Acreage Release Area B


Petroleum exploration well - dry holePetroleum exploration well - oil indication

Existing petroleum explorationor production permit Petroleum exploration well - oil and gas indication

Petroleum exploration well - gas indication

Petroleum exploration well - gas show with oil indication

Petroleum exploration well - gas accumulation

Petroleum exploration well - gas accumulation with oil showGas pipeline

Petroleum exploration well - oil show

Petroleum exploration well - oil and gas accumulations

Oil field

Gas field

Osprey 1

Delamere 1

Tenacious

Audacious

Fagin 1

Lantana 1

Augustus 1Hadrian 1

Cockell 1, ST1

Oliver 1, ST 1

TalbotAnson North 1

Pollard 1

Ponderosa 1

Ponderosa 1ABrontosaurus1, ST1

Maple 1

Cash 1, ST1

Willeroo 1

Elm 1

Allaru 1, ST1, ST2

Calytrix 1, ST1

East Swan 1East Swan 2

Eclipse 1

Elasmosaurus 1, ST1

Eclipse 2

Vesta 1

Hadrosaurus 1

Vulcan 1, 1A, 1B

AC/L3

AC/P32

AC/RL1

AC/L2

AC/P4

AC/P19

AC/P20

AC/P4

AC/L1

Arunta 1

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200

Northern Arafura Basin

Areas NT06-1, NT06-2, NT06-3 and NT06-4The department did not receive any applications for these areas (figure ��).Offers are still open until10 May 2007. The acreage has the followingfeatures:

Designated Frontier TaxConcession applies. It is ina largefrontierPalaeozoicbasin. Waterdepthsareshallow(70–220m).There are several potential source rocks. There are large structural plays and numerous stratigraphic plays. Recent studies have reduced the charge risk factor. Hydrocarbon shows/indicationsoccur in nearby wells. There are indications of shallow gas. Recentnon-exclusiveseismicdatais available.

Vulcan Sub-basin, Bonaparte Basin (Territory of Ashmore and Cartier islands)

Area AC06-1Anexplorationpermit(AC/P40)forthisarea(figure ��)was awarded on 1 March 2007 to the successful applicant, Coogee Resources (Ashmore Cartier) Pty Ltd, basedonachallengingexplorationprogram.Twocommittedexplorationwellsintheprimaryperiodaretobefollowedbyanothertwoexplorationwellsinthesecondaryworkprogram. Studies and seismic reprocessing are also committed.

Theacreagehasthefollowingfeatures:It is adjacent to hydrocarbon accumulations inproven shallower water. ThereisaTriassic–Jurassichorstblockplay,proventothesouthattheChallisandCassinioilfields.There is a continuation of the basin edge trend that hoststheTalbotoilfieldtothesouth.There is evidence of a localised hydrocarbon source kitchenwithinthegraben,alongtheeasternflankofthe Vulcan Sub-basin.Proprietary Vulcan Sub-basin Mega Survey seismic coverage is available.

Northern Browse Basin (Territory of Ashmore and Cartier islands)

Area AC06-2 Anexplorationpermit(AC/P41)forthisarea(figure ��)was awarded on 1 March 2007 to Shell Development (Australia) Pty Ltd and Nexus Energy Limited. Theproposed work program includes three committed

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figure ��. Area AC06-1 2006 acreage release in the Vulcan Sub-basin.

explorationwellsintheprimaryperiodalongwithseismicand other studies.

Thisacreagehasthefollowingfeatures:It is a provenmajor hydrocarbon province and isadjacenttosignificanthydrocarbondiscoveries.There is evidence of oil and gas migration and accumulation. It contains thick Jurassic–Lower Cretaceousmaturesource rocks. There are tilted Permo–Triassic to Jurassic faultblock traps. It contains high-quality Mesozoic fluvio-deltaic tomarine sandstone potential reservoirs with overlying Cretaceous shale seal. Water depths are less than 200 m.

TiTLES GRANTEd iN 2006

Northern Territory Adjacent AreaOn8August2006,NT/P71(99blocks)wasawardedtoNationalOil&GasPtyLtd,leadingajointventurewithaminimumnominatedexpenditureofA$21.85million.On8August2006,NT/P72(108blocks)wasawardedtoNationalOil&GasPtyLtd,leadingajointventurewith a minimum nominated expenditure of A$21.6million.

Ashmore Cartier areaOneProductionLicence(AC/L6),coveringthreeblocksover thePuffinoildiscovery,wasawarded toAEDOilLimited on 12 April 2006

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On 14 February 2006, AC/P38 (55 blocks) was awarded to Eni Oil Limited with a minimum nominated expenditure of A$ 23.1 million.On 7 April 2006, AC/P39 (11 blocks) was awarded to Alpha Oil & Natural Gas Pty Ltd, leading a joint venture with a minimum nominated expenditure of A$ 13.5 million.

Two retention leases were granted in the Ashmore Cartier Area:

On 21 July 2006, AC/RL6 (1 block over the Audacious oil discovery) was awarded to a joint venture led by OMV Timor Sea Ltd. On 27 November 2006, AC/RL7 (5 blocks over the Cash-Maple gas discoveries) was granted to a joint venture led by Coogee Resources (Ashmore Cartier) Pty Ltd.

OnshoreOn 21 November 2006, EP103 (156 blocks) was awarded to a joint venture led by Texalta Petroleum Ltd, with a committed work program of A$2.1 million.On 21 November 2006, EP104 (126 blocks) was awarded to a joint venture led by Texalta Petroleum Ltd, with a committed work program of A$2.1 million.On 14 March 2006, EP117 (114 blocks) was awarded to Sweetpea Petroleum Pty Ltd, with a committed work program of A$4.05 million.

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Conferences

In 2006, DPIFM participated in the following petroleum events:

APPEA 2006

At the APPEA Conference on the Gold Coast held on 7–10 May 2006, the Chief Minister, Hon Clare Martin MLA, presented a keynote address on the importance of placing downstream gas industry development on the national agenda. An exhibition stand was manned by NTG officers to promote Territory opportunities. Considerable interest was shown by the record number of delegates.

Over 1300 delegates attended the 2006 Conference on the Gold Coast, seeing first hand why APPEA hosts the most successful upstream oil and gas event in the Southern Hemisphere.

Memorable comments included Paris-based International Energy Agency’s Claude Mandil’s pointers on energy efficiency and oil prices; Colin Beckett’s clear plans for Australia as one of Chevron’s prime exploration targets; ExxonMobil Australia’s Mark Nolan’s Gorgon update and plea for offshore gas to get the same beneficial treatment as coal; warnings on

further skill shortages from Gerard Daniels; London-based Ben Mellor’s timely warnings on stamping out corruption in payments to governments in developing countries; and the NT Chief Minister, Clare Martin’s concern on adding value to northern Australia’s gas reserves and querying whether it was in the nation’s best interests to export virtually all of our gas as LNG.

Notable was APPEA Chief Executive, Belinda Robinson’s launch of a 60-page Issues Paper, as a first step in developing a joint industry–government initiative to underpin the industry’s future.

SEAAOC 2006The NT Government in a Joint Venture with IIR, organised the 12th SEAAOC Conference on 18-21 June 2006 at the SKYCITY Casino. The Chief Minister and the PNG Energy Minister, Sir Moi Avei, both presented keynote addresses. Other keynote speakers included the Australian President of ConocoPhillips - Laura Sugg, the Chief Executive of APPEA - Belinda Robinson, the Head of Resources Division DITR – John Hartwell, Deputy Assistant Secretary, Oil and Natural Gas, US Department of Enegy - James Slutz and the Undersecretary for Energy Affairs, California Resources Agency – Joe Desmond.

The Conference was very successful, attracting over 300 delegates and providing high quality speakers covering a broad geographical range and diversity of petroleum industry issues. SEAAOC 2007 will be held from 30 May to 1 June at the Holiday Inn Esplanade. Planning for SEAAOC 2007 is well underway and is being staged to coincide with

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2006 Offshore Acreage Release Area

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Bathymetry contour (depth in metres)Petroleum exploration well - dry hole

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Petroleum exploration well - oil and gas indication Petroleum exploration well - gas indication

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Cornea

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Copernicus 1, ST1Productus 1

Asterias 1

Columba 1, 1A

Saucepan 1Circinus 1, ST1

Maret 1Tahbilk

MontaraPadthaway

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Katers 1, ST1Anderdon 1

Marloo 1Birch 1, ST1

Longleat 1Taltarni 1

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Anson 1Skua

Swift 1Yering 1Kimberley 1

Grebe 1

Snipe 1Champagny 1, ST1

Keeling 1

Woodbine 1Delta 1

Mount Asmore1, 1A, 1B, 1B ST1

Turbo 1 Gryphaea 1

Discorbis 1, ST 1

Kalyptea 1, ST 1

Abalone 1, ST 1

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Field outlines courtesy of IHS Energy123°

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Figure 19. Area AC06-2 2006 acreage release in the northern Browse Basin.


the APEC energy ministers’ meeting to be held in Darwin on27–29May.

AAPG-2006The American Association of Petroleum Geologists conference was held in Perth in 2006. Although held at various “remote” venues of Perth, the 2006 AAPGInternational Conference and Exhibition proved to be arecord-settingmeeting.Thefinalofficialcountwas2,626registrations resulting in the largest international meeting in AAPGhistory.Geologistsfrom65countriesattendedthemeetingandwith907registrations,Australiansaccountedforthelargestnumbersofparticipants.OthercountrieswithlargerepresentationsincludedtheUnitedStates(283),theUnitedKingdom(100),Malaysia(90),Indonesia(76)andPeople’sRepublicofChina(67).

promotions

InconjunctionwiththeChiefMinister’skeynoteaddressesatAPPEAandSEAAOC,theNorthernTerritoryGovernmentundertook a range of activities to promote the development of downstream gas processing industry in the Territory. Theseactivitiesincluded:

presentations to Australian Government ministers and seniorofficialsa submission to the APPEA–Government JointLeadership Grouptheestablishmentofa jointworkinggroupunder theauspices of the Ministerial Councils for Energy and forMineralandPetroleumResourcestoexaminegassupply for future domestic demand, including a gas processing industrythe commissioning of two studies by the international consultingfirm,Nexant,ongasprocessingindustriessuch as petrochemicals, liquid fuels and fertilisers, to identify potential investment opportunities and issues.

Overview of Mining and petroleum Support 2006

Mining and Petroleum Support is one of the principle activities of the investment Services unit of the Department of Business, Economic and RegionalDevelopment (DBERD). The Mining and PetroleumSupport group promotes growth in businesses supporting the mining, oil and gas, and manufacturing industries.

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The Government’s two key initiatives for Territory industry development in relation to mining and petroleum supportare:

1. Making It in the Territory2. BuildingNorthernTerritoryIndustryParticipation.

Activities and achievements by the Investment Services in2006included;

participation in the exhibition “OSEA 2006”in Singapore (September 2006), leading aMinisterial delegation of local businesses and potentiallygainingover$30Minorders/workasaresult.ThisalsoincludedabriefingtotheBritishdelegation on “Opportunities in the Timor Seaandsurroundingareas”.publicationofanewcorporatebrochure:“GrowingMining & Petroleum Support in Australia’s NorthernTerritory”.organisation of the Alice Springs Petroleum & Mining Expo (March 2006), in conjunction withthe Northern Territory Geological Survey's Annual Geoscience Exploration Seminar (AGES), tosupport the use of local suppliers.the ongoing promotion of Darwin and Alice Springs as regional petroleum and mining supply and service centres.facilitation of several inward investment visits in the petroleum and mining supply and service industry, including the offshore sector.encouragement and support to assist Thiess Indonesia’s Kalimantan operations to use Darwin-based services for scheduled maintenance and breakdown repairs of heavy industry plant.continuing discussions with Inpex HoldingsInc on the service and support from Darwin of the exploration campaign over the Abadi gasdiscovery in Indonesian waters, along the border with Australia.the organisation of a seminar on oil and gas business opportunities in the Timor Sea. This washeldinJakarta(March2006)for60businesspeople, resulting in several investment visits to Darwin and follow-up visits to a number of Jakarta-based businesses.

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Photo courtesy of ConocoPhillips

dePartment of Primary industry fisheries and miNes

Petroleum titles:David [email protected]: +61 8 8999 5263fax: +61 8 8981 7016

Key contacts:Petroleum resources:moshtak Othmanmoshtak [email protected]: +61 8 8999 5260fax: +61 8 8999 6527

acKNOwleDGemeNTs

this annual report is a compilation of contributions made by several sections within the northern territory Government. the report was formatted by the Publications and Graphic design section of the northern territory Geological survey. the author acknowledges and expresses his gratitude to all contributors.

DPiFm contacts:Chief executive: John carrollexecutive director minerals and energy: Richard sellersdirector of mining and Petroleum authorisations and evaluations: Gillian Jandirector of energy: Jerry Whitfielddirector northern territory Geological survey: ian scrimgeourdirector of mining and Peroleum Compliance: michael Delosa

disclaimerWhile all care has been taken to ensure that information contained in northern territory oil and Gas report 2006, is true and correct at the time of publication, changes in circumstances after the time of publication may impact on the accuracy of its information. the northern territory of australia gives no warranty or assurance, and makes no representation as to the accuracy of any information or advice contained in northern territory oil and Gas report 2006, or that it is suitable for your intended use. you should not rely upon information in this publication for the purpose of making any serious business or investment decisions without obtaining independent and/ or professional advice in relation to your particular situation. the northern territory of australia disclaims any liability or responsibility or duty of care towards any person for loss or damage caused by any use of, or reliance on the information contained in this publication.

www.nt.gov.au/dpifm

Documents

Northern Territory Oil and Gas - La'o HamutukNorthern Territory Oil and Gas 2006 Department of Primary Industry, Fisheries and Mines 2006 HiGHLiGHTS 1. Every well drilled in 2006 encountered