Bass Oil Ltd
- ASX Code: BAS
- Market Cap: $17.43M
- Shares on Issue (SOI): 290,475,019
- Cash: $616,000 (as of 31 December 2024)
Bass Oil Ltd has recently unveiled plans to undertake a comprehensive study focusing on the substantial gas potential within the Triassic formations of the northern Cooper Basin, with a spotlight on the Kiwi gas field. This strategic move aims to capitalise on the meaningful reserves and development potential identified in the area, positioning the company to address the escalating energy demands in eastern Australia.
Exploring the Triassic Gas Play: What Does It Mean for Bass Oil Ltd?
The decision to evaluate the larger Triassic gas play stems from encouraging results at the Kiwi gas field. By investigating additional targets beyond Kiwi, Bass Oil seeks to unlock further hydrocarbon reserves in an underexplored region of the Cooper Basin. This initiative aligns with the industry's shift towards securing economical and sustainable energy sources, particularly those with low carbon intensity.
Key Highlights of the Announcement
- Positive Flow Rates at Kiwi: The Kiwi-1 well demonstrated a maximum production rate of 4.1 million cubic feet of gas per day (MMscf/d) and condensate production nearing 988 barrels per day.
- Liquids-Rich Gas with Low CO₂ Content: The gas produced has a CO₂ content of less than 5%, aligning with the growing demand for cleaner energy sources.
- 100% Ownership of Strategic Licences: Bass Oil's full control over key licences in the northern Cooper Basin enhances its ability to develop and expand its operations efficiently.
- Potential for Additional Discoveries: The study could highlight larger stratigraphic plays, opening doors to new exploration opportunities within the Triassic formations.
Why Is the Kiwi Gas Field a Game Changer?
The Kiwi gas field emerges as a cornerstone asset for Bass Oil Ltd, offering substantial growth opportunities due to its significant contingent resources and proximity to existing infrastructure. The field's potential for both gas and condensate production enhances its economic viability and attractiveness to investors.
Resource Evaluation and Economic Potential
- 2C Contingent Resources: The field holds an estimated 3.6 billion cubic feet (BCF) of gas and 416,000 barrels of condensate.
- Rapid Payback Period: Under the best estimate 2C case, the project boasts a payback period of just one year.
- Impressive Net Present Value (NPV): The NPV (Before Tax; 10% Discount Rate) is projected at A$35.4 million, indicating strong profitability.
- Low Development Risk: The field's proximity to infrastructure and low CO₂ content reduces operational risks and potential environmental liabilities.
The Kiwi field's strategic location within the Cooper Basin, coupled with its high condensate yields, positions it favourably against other developments in the region. Similar to how Element 25's Butcherbird Project is transforming Australia's manganese sector, Bass Oil aims to revolutionise the local energy landscape by harnessing untapped resources efficiently.
What Makes the Recent Kiwi Gas Test Stand Out?
The recent flow test at Kiwi-1 exceeded initial expectations, showcasing the field's robust production capabilities. The results not only confirm the commercial viability of the project but also pave the way for accelerated development plans.
Test Results at a Glance
- High Production Rates: Achieved 4.1 MMscf/d of gas and nearly 988 barrels per day of condensate.
- Sustained Wellhead Pressure: Maintained a pressure of 1585 psi throughout the testing period.
- Liquids-Rich Reservoir: The high condensate-to-gas ratio enhances the project's revenue streams.
These outstanding results are reminiscent of the success stories in other sectors, such as Rio Tinto's $2.5 Billion Rincon Lithium Project making significant strides in battery metals. Bass Oil's achievement at Kiwi underscores the potential for independent operators to make substantial impacts in the energy market.
Understanding the Geological Significance
The Kiwi gas field is situated within the Triassic-aged Callamurra Formation, an area that has remained underexplored compared to other parts of the Cooper Basin. The geological setting presents unique opportunities for discovering new hydrocarbon reserves, particularly through the identification of stratigraphic traps.
The Role of Stratigraphic Traps in Hydrocarbon Exploration
Stratigraphic traps are geological formations resulting from changes in rock layers, rather than structural deformations like folds or faults. They often involve variations in rock permeability, porosity, or sediment deposition, which can trap hydrocarbons effectively.
For Bass Oil, the potential presence of large stratigraphic traps, identified through seismic amplitudes in the Dundinna 3D survey, could lead to significant new discoveries. This approach mirrors the innovative exploration techniques used in other mineral sectors, such as the advancements in the geology of ore deposits from Earth's core to economic mineral concentrations.
Future Plans and Key Milestones
Bass Oil has outlined a clear roadmap to advance the Kiwi project from successful testing to full-scale production. The company is committed to accelerating development while exploring additional opportunities within its licence areas.
Strategic Steps Forward
- Front-End Engineering and Design (FEED) Study: Currently underway to refine project parameters and optimise development strategies.
- Final Investment Decision (FID): Expected in 2025, following the completion of commercial agreements and detailed engineering studies.
- Seismic Data Reprocessing: Re-evaluating the Dundinna 3D seismic data to identify new prospects and leads, potentially expanding the resource base.
- Infrastructure Development: Planning to connect the Kiwi field to the existing gas and liquids transportation network within the Cooper Basin.
Bass Oil's proactive approach is indicative of the broader trend in the industry, where companies are focusing on strategic resources to meet future energy demands. This is akin to how Australia is boosting global rare earth supply through projects like Iluka's Eneabba Refinery.
Investment Proposition: Why Bass Oil Ltd Is Worth Watching
For investors seeking exposure to the energy sector with a focus on low-carbon, high-return projects, Bass Oil Ltd presents a compelling case. The company's strategic assets, combined with favourable market conditions, position it for significant growth.
Key Investment Highlights
- Strong Economic Fundamentals: With a projected payback period of one year and a high NPV, the Kiwi project offers attractive financial returns.
- Market Demand for Clean Energy: The low CO₂ content of the gas aligns with the global shift towards cleaner energy sources, potentially commanding premium pricing.
- Exploration Upside Potential: The underexplored Triassic formations may yield additional discoveries, enhancing the company's resource base.
- Strategic Licences and Infrastructure: Full ownership of key licences and access to existing infrastructure reduce operational risks and capital requirements.
Bass Oil's initiatives reflect a strategic vision similar to other successful exploration companies. For instance, Prodigy Gold's strategic exploration at the Hyperion Deposit showcases how focused exploration can unlock significant value.
Conclusion: A Promising Future for Bass Oil Ltd
Bass Oil Ltd's concentrated efforts on the Kiwi gas field and the broader Triassic gas play position the company as a dynamic player in Australia's energy sector. The combination of impressive test results, strategic resource potential, and a clear development plan underscores the company's capacity for growth and value creation.
As the demand for cleaner, low-carbon energy sources continues to rise, Bass Oil's initiatives align well with market trends. Investors and industry observers should keep a close watch on the company's progress as it advances towards key milestones in 2025 and beyond.
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