Beach Energy (ASX:BPT) and Ironbark Participants Left Disappointed As First Well Comes Empty

The recent drilling results at Ironbark-1 exploration well has left the operator BP and associated partners Cue Energy, Beach Energy Limited (ASX:BPT), and New Zealand Oil & Gas (NZX:NZO) disappointed with the well showing no promising hydrocarbon deposits.

First Exploratory Well at Ironbark Comes Empty

Image Source: Megapixl

The Ironbark-1 well in North Carnarvon Basin, off the North West coast, which had been seen as a potential gas supplier to the North West Shelf liquified natural gas plant, would now be plugged and abandoned, in-line with the pre-drill planning.

In an announcement to stakeholders, both the operator and associated partners said that the well has left them disappointed post intersecting its primary target.

The exploration well intersected the Mungaroo Formation at 5,275 metres, prompting the operator and associated partners to continue the drilling further. However, post drilling the exploration well to a total depth of 5,618 metres, the well returned no major oil and gas.

The drilling operations at the prospect commenced on 31 October 2020 with participants BP Developments Australia Pty Ltd, acting as the operator and holding 42.5 per cent interest, Cue Exploration Pty Ltd, holding a 21.5 per cent stake, Beach Energy Limited, holding a 21 per cent stake, and New Zealand Oil & Gas Limited, holding 15 per cent stake.

However, BP and partners in the prospect now plan to analyse the subsurface data from the wellbore to determine the possible model for further exploratory drilling at the Ironbark project.

The market reacted sharply to the announcement with BPT shares witnessing an intraday fall of ~ 11.20 per cent from its high of $1.945.

However, despite witnessing a large intraday fall, the short-term uptrend of the Company remained in place with the stock moving in a series of higher highs and lower lows from the level of $1.150 (intraday low on 2 November 2020) amidst some business developments.

Waitsia Gas project Stage 2 Achieves FID

BPT and the Waitsia JV partner AWE Perth Pty Ltd - a related body corporate of Mitsui E&P Australia, reached an FID for Stage 2 and signed key commercial agreements with NSW project participants.

The first equity LNG sales from Waitsia Stage 2 are expected to commence during the second half of the year 2023, with a total expenditure to the first production of $350 – $400 million net to BPT.

Playing A Part in KGP Tolling facility Milestone

Image Source: © Kalkine Group 2020

Recently, the participants of the North West Shelf Project inked a fully-termed gas processing agreements (GPA) for processing third-party gas through NWS facilities, marking a key milestone in the transformation of the Karratha Gas Plant (KGP) into a third party gas tolling facility and secures gas to fill emerging processing capacity.

Under the GPA, Woodside Petroleum Limited (ASX:WPL) and partners would provide gas processing services to BPT for onshore Waitsia Gas Project Stage 2 for an aggregate of approximately 7.5 million tonnes, starting from H2 2023 to 2028.

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