If proven to be commercially viable, Warro Gas will become a major supplier of domestic gas to industry and will be the first commercially viable tight gas field in Western Australia.
The Warro Gas field, located 200km onshore north of Perth (60 kilometres east of Jurien) covers approximately 7,000 hectares, is about 4km below the surface and holds up to 5 TCF of gas in place.
Drilling is expected to commence in the fourth quarter of 2008 when a new rig will arrive from the USA, along with other equipment from overseas.
Latent Managing Director Stephen Keenihan said recent events had highlighted the critical need for a comprehensive and diverse range of energy suppliers in WA.
“Warro would provide Western Australia with an alternative and new supply of gas to help keep up with the increasing demand for energy for the domestic market,” Mr Keenihan said.
“Tight gas, such as that at Warro, has not previously been economic to develop in WA, but the recent price rise in the WA domestic gas price combined with the successful application of the right technology and Alcoa’s long history in supporting energy infrastructure projects has encouraged us to investigate the viability of the Warro field.”
Alcoa of Australia Managing Director Alan Cransberg said this latest collaboration builds on Alcoa's long history of underpinning energy infrastructure in Western Australia.
“Western Australia is experiencing a serious shortage of gas with commercially viable supply failing to meet the State’s growing demand,” he said.
“Recent events have reinforced the importance of finding new energy sources.
"The time to act is now. By partnering with Latent Petroleum, Alcoa is doing its part to find solutions and create a secure energy future for the State.”
Warro is a ‘tight gas’ field, where gas is held in tight (low permeability) sandstone reservoirs that don’t naturally flow gas to surface. The rocks must be ‘coaxed’ through fracture stimulation to yield their gas.
Tight gas fields are very common in other parts of the world, now providing over 20% of the USA domestic gas supply.
If the same technology can be applied successfully in WA, the Warro Gas field could yield 1-3 TCF of gas for domestic use.
During the life of the field the Joint Venture could drill over 200 wells to produce an average of 100-150 million cubic feet of gas a day (approx 100-150TJ/day), which is approximately 10% of the needs of the South West.
The gas will be piped to the gas processing plant from various well pad groupings before being delivered to the ‘Dampier to Bunbury’ and ‘Parmelia’ pipelines 30km to the west where it will be sold to customers north and south along the pipelines.
If developed, the Warro Gas Project would become a major supplier of gas (over 100TJ/day), provide added security to WA’s gas supply and prove the presence of a major new tight gas resource in the Perth Basin.
It will also introduce a new industry and new technology to WA; and provide employment opportunities in the Mid West region as the field activities will require continuous drilling activities over the next 20 years or more.
As part of the Joint Venture, Alcoa have agreed to fund a phased multiwell and 3D seismic program of the field in return for a 65% interest in the project.
At the conclusion of the farm-in work, Latent Petroleum will hold a 25% share in the project and TranServ Australia Limited (ASX: TSV) will hold a 10% share.
The Warro Gas Project will provide Western Australia with an alternative and new supply of gas to keep up with the increasing demand for energy for the domestic market.
For further information contact:
Amanda Reid
Purple Communications for Latent Petroleum
Tel: +61 (0) 8 9485 1254 Mob: 0424 839 062
Donna Cole
Last Say Communications for Alcoa
Tel: +61 (0) 8 9328 1111 Mob: 0419 901 229
ABOUT LATENT PETROLEUM
Latent Petroleum Ltd is an unlisted private company established to develop and produce gas for the WA domestic market from the Warro Gas field, located onshore in the Perth basin, 200 kilometres north of Perth.
Latent was founded by Hercules Energy, an experienced energy venture capital group, and is managed by a team of experienced oil and gas specialists who have substantial experience with energy projects in WA. Latent will operate the Warro Gas Project.
www.latentpet.com.au
ABOUT ALCOA
Alcoa’s Australian operations make up an integrated aluminium industry which includes mines, refineries, smelters, rolled products plants and a recycling operation. Alcoa of Australia has been a major Australian exporter for some 40 years. It directly employs around 6,280 people plus another 1,500 contractors, predominantly in regional Australia.
Alcoa of Australia is part of Alcoa World Alumina and Chemicals (AWAC) which is 60-percent owned by Alcoa Inc. and 40-percent owned by Alumina Limited. Alcoa Inc has 97,000 employees in 34 countries and has been named one of the top most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland.
www.alcoa.com.au
ABOUT TRANSERV
TranServ is an ASX listed (ASX: TSV) junior energy company. TranServ provided seed capital to fund the early stages of the Warro Gas Project and holds a 10% interest carried for the first $40million of project expenditure. The Warro Gas Project interest represents TranServ’s principal undertaking.
www.transerv.com.au
