The Montara operations involve the extraction of oil using platform production wells for the Montara field and subsea production wells for Swift, Skua and Swallow fields. The oil from the subsea wells transported via subsea flowlines to an unmanned Wellhead Platform (“WHP”) and then to the Montara Venture Floating Production Storage and Offloading (“FPSO”) facility which acts as a hub for the Montara cluster, and potentially more stranded discoveries in the region. Producing sandstone formations include prolific Plover, Montara and Lower Vulcan formations. All producing formations have high permeability (0.5 – 4 Darcy) and high porosity (18 – 24 per cent). The Montara assets have gross 2P reserves of 28.2 MMbbls oil (gross and net) and 3P reserves of 38.5 MMbbls oil (gross and net), split as follows between the fields:
- the Montara field, located in production licence AC/L7 has 14.9 MMbbls of gross and net 2P reserves;
- the Skua field, located in production licence AC/L8 has 6.9 MMbbls of gross and net 2P reserves; and
- the Swift/Swallow field, located in production licence AC/L8 has 6.4 MMbbls of gross and net 2P reserves.
Current production from the Montara Project is 10.3 mbbls/d.
Jadestone sees significant further value in the Montara Assets. The Company has identified several different areas in which it believes it can potentially realise value in the future. These include:
- Further infill drilling, not included in ERCE’s reserves case, have been identified by Jadestone management in the Montara and Skua fields. This includes one further platform well on the Montara field which would be a sidetrack of H4, capturing remaining volume along the northern bounding fault, and two further subsea wells on Skua capturing volumes further north along the crest. Each of these wells would have an initial rate of 3 mbbl/d and targeting a combined volume of 5.3 MMbbl;
- Tie-back additional existing in-field and near-field discoveries as facilities become available, currently the well head facilities are either fully utilised or allocated to existing and near-term production;
- The Company has identified further prospectively in the blocks. The Company intends to shoot 3D seismic surveys over the blocks. This is expected to help to further define the existing prospects and identify further prospects across the blocks which the Company may target in the future;
- In the blocks neighbouring the Montara Assets there are multiple oil and gas discoveries and previously suspended fields. Many of these discoveries are currently stranded as they are not of a size that can economically justify a standalone development. Currently the Montara Assets infrastructure is the only infrastructure in the area through which these discoveries could potentially be produced. The Company may in the future explore opportunities to monetise these assets which may be through acquisition, farm-in or third party tariff arrangements; and
- Within the Company’s blocks, there are currently stranded discovered gas resources which are currently not of a size which would make commercialisation economic. However, within neighbouring blocks there are also other similarly stranded gas discoveries and the Company could in the future explore joint development solutions for these discoveries. This will, however, remain subject to pricing, technology and neighbouring activities.