PERTH (miningweekly.com) – Oil and gas company AWE has warned of a A$100-million to A$110-million noncash impairment on the carrying value of its BassGas asset, in Victoria, for the full year.
Joint venture partner Origin Energy has provided a preliminary reassessment of the reserves for the Yolla field, based on new data obtained from the recently drilled Yolla 5 and 6 development wells, which resulted in a reduction in the estimated original gas in place for the field.
Origin has said, however, that further technical work was required to validate this estimate.
AWE has chosen to adopt the preliminary reassessment of the field and has reduced its share of reported remaining 2P reserves for the Yolla field by 5.5-million barrels of oil equivalent, down to 13-million barrels of oil equivalent.
After the recent 19.3-million barrels of oil equivalent increase in the 2P reserve at the Sugarloaf project, the Yolla reduction represented some 5% of the company’s total remaining 2P reserves of around 100-million barrels of oil equivalent.
“The updated reserves at Yolla will result in less gas production later in the field life, but, overall, it is not expected to have a material impact on production or cash flow during the next three to four years,” said AWE MD Bruce Clement.
“We anticipate production from the field will increase to a rate close to the facility’s capacity of 76 TJ a day, once the Yolla 5 and 6 development wells are brought on stream.”
Clement said the company would now consider accelerating development feasibilities for the Trefoil field, in an adjacent permit, to determine if its 2C contingent resource of 17-million barrels of oil equivalent could be developed earlier as an incremental project to Yolla production.
“AWE will continue to focus on progressing its major development projects, particularly the appraisal drilling and early development of the Waitsia gas project, in Western Australia.”
Meanwhile, AWE would also undertake detailed assessment of the Yolla field reserve, prior to the release of a reserve and resource report.