Confident view of oil exploration

Press, 14 June 1984, Page 28

Confident view of oil exploration

PA Melbourne The Australian oil and gas exploration industry is geared for a highly successful year in 1984 85, led bv further gains in the Timor Sea, according to a detailed study by an oil analyst. Stuart McKibbin.

Mr McKibbin's report presents a confident view of the industry compared with the dire predictions made by the oil industry lobby group, which is now embroiled in a bitter fight with the Federal Government over the planned Resources Rent Tax (RRT). Although Mr McKibbin. of the Melbourne broker, A. C. Goode and Company, believes that RRT will eventually reduce off-shore exploration. he forecasts substantial rewards for exploration companies over the next two vears.

The report, released earlier this month, says that a record number of exploration and appraisal wells will be drilled in Australia during 1984/85, with the distant Timor Sea region to emerge as the “major area of interest.” Successful oil discoveries off Western Australia, the Northern Territory, and in onshore regions covering South Australia and Queensland have “boosted confidence amongst oil companies," Mr McKibbin said. “The 1984/85 exploration years will be some of the most interesting and rewarding years experienced in the Australian exploration industry.” he said.

The discovery of the Jabiru No 1A oil well in the Timor Sea last year led to a revival of public interest in oil and gas exploration, but the subsequent failure of some major wells has hammered exploration companies on local and overseas stock exchanges.

Mr McKibbin said the oil-and-gas index has fallen bv

about 30 per cent in recent weeks compared to the early part of 1984, because of concern over high U.S. interest rates, the strength of the U.S. dollar and the failure of exploration and

appraisal wells in the Timor Sea and offshore Western Australia. But. he said, market values of exploration companies were now at a "substantial discount to our appraised values" and recommended a number of companies with interests covering the Timor Sea. the Cooper Eromanga Basin, the Canning Basin, the Barrow sub-basin, and the Bonaparte Gulf.

"The successful oil discoveries at Jabiru (Timor Sea). the Jackson-Nae-cowlah trend (Cooper Eromanga). Tintaburra (Cooper Eromanga). South Pepper-North Herald. Harriet (all Barrow), the recovery of oil at Turtle (Bonaparte Gulf), and the BaskerManta (oil finds) have

boosted confidence amongst oil companies.”

A record 39 oil and gas discoveries were made during 1983. dominated by the Cooper Eromanga Basin with 21. and a further nine have been made this vear.

Mr McKibbin emphasised the attraction of the Timor Sea in his forecast and said that in spite of recent failures via the Eclipse One wildcat well and the Jabiru No. 2 appraisal well "the geological parameters in this area are conducive to maior oil discoveries."

"The reservoir quality, the sealing mechanisms ami the trapping mechanisms are all in place and the known oil maturations has allowed billions of barrels of oil to be generated." he said.