On 22 October 2014, Eneabba announced that it had entered into an agreement with Green Rock Energy Limited (ASX:GRK) to acquire 100% of the prospective Ocean Hill Block Application (STP EPA 0090, formerly designated Bid Area L12-7), located in the north Perth Basin.
The Ocean Hill Block acquisition is intended to complement Eneabba’s existing Mid-West energy projects and establish Eneabba as a gas explorer in the prospective Perth Basin.
The Ocean Hill application and Oil and Gas rights comprises 297 km2 and is located about 225 km north of Perth and 90 km southeast of Dongara and the Eneabba Centauri-1 Power station site.
Location of the Ocean Hill Block
The block area contains a large faulted four-way dip closure that was tested by drilling of the Ocean Hill-1 well in 1991. The well reached a total depth of 3,840m in the Jurassic Cattamarra Coal Measures before being suspended as an uneconomic gas discovery. Good gas shows were encountered in the Jurassic Cadda Formation and Cattamarra Coal Measures over the entire interval of over 800m from about 3,000m to total depth, and analysis of the electric logs indicated over 100m of net gas pay within multiple sands through the zone. An open hole drill stem test flowed gas rate of 0.7MMscf/d from the interval 3,063-3130mKB in the Cadda Formation with associated liquids of 15-23 bbl/MMcf.
Eneabba believes that Ocean Hill can be commercialised through the application of modern advances in 3D seismic, directional drilling technology and completion techniques and notes that gas prices are significantly higher than when the Ocean Hill-1 well was originally drilled.
The Ocean Hill structure has two culminations and the northern one has been assigned 2C contingent resources of 360 BCFG and 1.2 MMBBL of condensate by an independent evaluation by DeGolyer and MacNaughton, as announced to the ASX by Greenrock on 4 October 2013. Refer to this ASX announcement for competent persons statement and information on resources reporting.
Following completion, Eneabba plans to carry out exploration on Ocean Hill in accordance with the permit application made by Green Rock to the Department of Mines, being a 3D seismic program and drilling of well in the next two years. Eneabba intends to secure a farm-in partner to assist with exploration funding. Green Rock has received expressions of interest from various parties. Further details of exploration plans will be released to the market shortly.
Under the Permit Sale Agreement, Eneabba may acquire 100% of the Ocean Hill Block for the following consideration:
(a) Upfront payment of $30,000 on signing of binding agreement;
(b) Cash payment of $300,000;
(c) 40,000,000 Eneabba Ordinary Shares; and
(d) Eneabba to pay applicable native title costs to a maximum of $75,000.
The Agreement is subject to a number of conditions precedent including due diligence by Eneabba.
Click here for ASX announcement with further details on the project.
Eneabba intends to proceed with a Non-Renounceable Entitlements Issue of Shares of five (5) new Eneabba Ordinary Shares for every eight (8) Eneabba Ordinary Shares held at the Record Date at a price of $0.0125 to raise approximately $1,250,000.
The funds raised from the Entitlements Issue, together with existing cash reserves will be applied for development of the Ocean Hill Block and for development of Eneabba’s existing energy assets, working capital and costs of the Entitlements Issue offer.
Please click here for a copy of the Entitlements Issue Offer Document.
Eneabba Gas Limited was established as a public company on 12th December 2003, following detailed investigations into the viability and potential of UCG "Syngas" in the regions north of Metropolitan Perth. The Company was listed successfully on the Australian Stock Exchange (ASX code: ENB) on 28 April, 2006.
With the severe power shortages in Perth Metropolitan Area which began in February 2004 and the substantial growth demand from mining and infrastructure in the Mid West of WA, the Company developed a strategy to build a power station in the Mid West region as well as being in the proximity of the fast developing Mid West for direct delivery of power.
The location of its proposed power station is close to its tenements, with the coal tenements that may well provide an alternative fuel supply for the gas-fired turbines of Centauri 1 at a more economical cost. The company has entered into agreements to ensure fuel will be a certainty.
Eneabba Gas Limited is focused on the development of the 168MW syngas, gas-fired Centauri 1
power station on Company-owned land 8km east of Dongara in the Mid West of Western
Australia. Its Centauri 1 Power Station project now has all the necessary regulatory approvals
for development. Eneabba Gas proposes to market power from Centauri 1 to the fast growing
Mid West region of Western Australia.