Petroleum exploration activity in the onshore basins of the Northern Territory is mostly focused on the Beetaloo Sub-basin and the Amadeus Basin. Exploration for sub-salt and intra-salt plays for helium and hydrogen accumulations is also focused on the Amadeus Basin.
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Overview
Onshore petroleum exploration activity in the Territory in 2023 was largely focused on appraisal of dry shale gas plays in the Beetaloo Sub-basin as the basin moves towards commercial production. There are currently 37 granted exploration licences for petroleum in the onshore Northern Territory (NT).
Petroleum exploration expenditure for 2022-23 was $125.4 million, according to the Australia Bureau of Statistics (ABS). The ABS do not provide a breakdown of offshore vs onshore for petroleum expenditure in the NT.
Since 2010, more than 70 exploration and production wells have been drilled onshore in the Northern Territory and exploration seismic data has been acquired in the McArthur, Amadeus, Pedirka and Georgina Basins. Read on for a detailed review of exploration activities in 2023.
The Beetaloo Sub-basin is a significant depocentre of Mesoproterozoic Roper Group sedimentary rocks that underlies the Mesozoic Carpentaria Basin in the vicinity of Dunmarra and Daly Waters, and is the Territory’s most advanced shale gas play. The B-shale of the Amungee Member of the Velkerri Formation is the primary target for shale gas exploration, with demonstrated continuity of gas-rich productive shales across a vast area of the sub-basin.
Santos Ltd have exploration tenure in the eastern Beetaloo Sub-basin in joint venture with Tamboran Resources Ltd. Following flow-testing by Santos at the Tanumbirini-2H and Tanumbirini-3H horizontal wells in EP161in 2022, Tamboran Resources announced in June 2023 that modelling of the production curves by an independent third-party yielded a 20-year Estimated Ultimate Recovery of ~16.8–18.5 billion cubic feet (Bcf) for a proposed ~3000 m development-scale well. In September 2022, the Unrisked 2C Contingent Gas Resource for EP161 is 1.617 trillion cubic feet (Tcf) gas. The wells were suspended in early 2023 with no further drilling or testing occurring on EP161.
Empire Energy Group Ltd continued drilling and flow-testing of wells in EP187 on the eastern margin of the Beetaloo Sub-basin. During the first half of 2023, Carpentaria-2H horizontal well, 11 km north of the Carpentaria-1 well, was reopened for extended production testing and flowed for a period of 76 days. The well produced high calorific gas at an average rate of 2.2 million cubic feet per day (mmscfd), with a final rate of 1.6 mmscfd. Following a 5 month shut-in, the Carpentaria-3Hwell, located adjacent to Carapentaria-2H, underwent extended production testing in mid-2023. The well had been drilled in late 2022 to a total depth of 4460 m, with a total horizontal section length of 2632 m of which 2374 m was within the target Velkerri-B shale. Over the 63-day duration of the second phase testing, the well averaged a flow rate of 2.7 mmscf per day, with a final rate of 2.0 mmscf per day. Following production testing, production results of both Carpentaria-2H and C-3H were being reviewed for ongoing optimisation of future fracture stimulation programs. In May 2023, Empire Energy announced a 270% increase in the 2C Contingent Resources for EP187 to 1.467 Tcf.
In December 2023, Empire Energy announced it had acquired AGL Ltd’s Rosalind Park Gas Plant in order to accelerate the path to Carpentaria Pilot Project production and reduce the capital expenditure required to commence gas sales. The company announced that they are focused on progressing the Pilot Project towards a final investment decision, targeting a sales gas production rate of up to 25 terajoules (TJ) per day utilising the existing McArthur River Pipeline.
Tamboran Resources, in joint venture with Bryan Sheffield and Falcon Oil and Gas Ltd, is the operator on three permits in the central part of the Beetaloo Sub-basin (EP 98, 117 and 76). In the first half of 2023, Tamboran stimulated and flow-tested the Amungee 2H development well, 60 km east of Daly Waters, which was drilled in late 2022 to a total depth of 3883 m, including a 1275 m horizontal section. The company commenced fracture stimulation of the well across 24 stages in February 2023. The well achieved gas breakthrough, but modelling and independent third-party analysis of fluids recovered from the well identified potential skin inhibiting gas and water flow, with average gas flow rates of 0.97 mmscfd over the first 50 days of testing. In late September 2023, Tamboran commenced drilling the Amungee 3H well, which was drilled to a total depth of 3837 m in 17.9 days, including a 1150 m horizontal section within the Mid Velkerri B Shale.
In August 2023, Tamboran Resources commenced drilling of the Shenandoah South 1H well in EP117, which reached a total vertical depth of 3300 m, intersecting ~90 m of Mid-Velkerri B-shale with strong gas shows. In February 2024, Tamboran announced that the well achieved an average 30-day initial production (IP30) flow rate of 3.2 mmscfd over the 501 m, 10 stage stimulated length within the Mid Velkerri B Shale, normalized to 6.4 mmscfd over 1000 m, Testing was carried out following the installation of production tubing and a three-week soaking period to allow for water used in the stimulation process to be absorbed by the shale. This was the highest normalised flow-rate achieved in the Beetaloo Sub-basin to date.
Based on the result from the Shenandoah South 1H well, Tamboran announced the company has confidence to progress the proposed 40 mmscfd Pilot Project in the Shenandoah South region. Tamboran is targeting first production from the project in first half 2026, which is expected to deliver volumes into the Territory gas market over a 10-year plateau period, subject to completion of a binding Gas Sales Agreement, construction of necessary midstream infrastructure, and funding and key stakeholder approvals. The proposed Pilot Project is planned to include six upfront development wells drilled to 3050 m to achieve plateau production, as well as the construction of compression facility and a 35 km pipeline link to the Amadeus Gas Pipeline.
McArthur Basin
In January 2024, Armour Energy Group sold its assets, including its exploration permits in the McArthur Basin in the Territory to ADZ Energy Pty Ltd.
In February 2024, Top End Energy Ltd announced that they had acquired granted EPs 144, 153 and 154 in the greater McArthur Basin and South Nicholson Basin from Minerals Australia Pty Ltd and Jacaranda Minerals Ltd, wholly owned subsidiaries of Hancock Prospecting.
Amadeus Basin
The Territory’s current onshore gas production is entirely sourced from Mereenie, Palm Valley and Dingo fields in the Amadeus Basin operated by Central Petroleum Ltd. In 2022, 13.305 billion standard cubic feet (bscf) of gas was produced in the onshore Territory, a 8% decrease on 2021. This comprised 9.746 bscf from Mereenie, 2.114 bscf from Palm Valley and 1.445 bscf from Dingo. Onshore oil production in the Territory in 2022 was sourced entirely from the Mereenie Field, with 0.144 million barrels (mmbbl) of oil produced. Proven and Probable (2P) gas reserves (at 31 December 2021) are 82.67 bscf gas and 0.89 mmbbl oil at Mereenie, 23.15 bscf gas at Palm Valley and 33.04 bscf gas at Dingo.
In September 2023, Central Petroleum announced that farm-out agreements with Peak Helium Pty Ltd, covering helium, hydrogen and hydrocarbon exploration in the southern Amadeus Basin, had been terminated. As a result, planning has been suspended for drilling of sub-salt exploration wells to be operated by Santos (Dukas; EP112), Jacko Bore (formerly Mt Kitty; EP125) and Mahler (EP82).
In September 2023, Greenvale Energy Ltd announced it had executed a farm-in agreement with Mosman Oil and Gas Ltd to earn up to 75% in EP145, located east-southeast of Mereenie. EP145 has Best Estimate Prospective Resources of 440 Bcf gas, 26.4 Bcf helium and 26.4 Bcf hydrogen in the permit area.
McArthur Basin
In February 2023, signed an agreement with Lucapa Diamond Company Limited for supply of gas from the Glyde field in the McArthur Basin to the Merlin diamond project, located 20 km from the field. The agreement contemplates sales of gas from the conventionally reservoired Glyde field in mid-2025.
Elsewhere in the greater McArthur Basin, Armour Energy, Minerals Australia (a subsidiary of Hancock Prospecting) and Empire Energy have large tenement holdings with a number of stacked conventional and unconventional petroleum plays.
Amadeus Basin
In April 2022, Central Petroleum Ltd, with its joint venture partners New Zealand Oil and Gas Limited and Cue Resources Limited, spudded the Palm Valley 12 well, which was originally intended to target a deep exploration target in the Arumbera Sandstone. However, after encountering challenging drilling conditions, the well was revised to focus on near-term production options in the Pacoota Sandstone. A sidetrack in the Pacoota P2 and P3 units was abandoned in August 2022, and the well was side-tracked to test the shallower Pacoota (P1) Sandstone at ~1770 m depth. The PV12 ST2 lateral appraisal well was drilled to a measured depth of 3039 m in the P1 sandstones in early October and flowed gas at 11.8 mmscfd when tested in mid-October. The well was successfully completed as a production well in late November.
Central Petroleum also have farm-in agreements with Santos Ltd and Peak Helium Pty Ltd targeting sub-salt and intra-salt plays of the Neoproterozoic lower Gillen-Heavitree System in the southeastern part of the basin that have potential for large gas, helium and hydrogen accumulations. Three sub-salt exploration wells are planned to be drilled in the southern Amadeus Basin commencing in 2023, targeting hydrocarbons, helium and naturally occurring hydrogen at Dukas (EP112), Jacko Bore (formerly Mt Kitty; EP125) and Mahler (EP82), operated by Santos. Peak Helium also has one 100%-owned exploration permit on the southeastern margin of the basin.
Mosman Oil and Gas Ltd continued to explore for multiple plays for hydrocarbons, helium and hydrogen in EP145, located east-southeast of Mereenie. During the year, the company announced Best Estimate Prospective Resources of 440 bcf gas, 26.4 bcf helium and 26.4 bcf hydrogen in the permit area.
