Onshore gas development: opportunities and challenges

Matthew Doman, Director SA/NTAustralian Petroleum Production and Exploration Association 24 May 2016, Katherine

APPEA?

• The Australian Petroleum Production & Exploration Association represents the Australia’s upstream oil and gas industry.

• Established in 1959.• APPEA member companies produce around 98% of Australia’s oil and gas. • APPEA’s activities extend from the national to a local government level.

www.appea.com.au

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Priorities for APPEA

North West Shelf Venture (1989) Darwin LNG (2006) Pluto LNG (2012)

• Access to resources.• Market‐based energy policies.• Fiscal stability.• Robust, efficient regulation• Viable labour markets: mobility, flexibility, productivity.• Improving community awareness and promoting ‘science’.

Gas already a major economic driver for NT• Natural gas is already the NT’s largest export

• Darwin LNG commenced 2006• Ichthys project to more than treble LNG exports from 

2017

• Gas generates over 90% of NT electricity

• Offshore projects dominate current production, but increasing focus onshore

• Mereenie ‐ NT’s oldest operating oil and gas project (commenced production 1984). Central Petroleum recently acquired 50% of field and operatorship

• Onshore drilling activity• 6 wells in 2016; 6 in 2015• Companies with current exploration include Central 

Petroleum, Origin, Pangaea, Santos, Beach Energy and Armour Energy 

Source: DME as at December 2013

Current exploration in greater Katherine region

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APPEA members currently targeting resources in McArthur/Beetaloo region:

Pangaea ResourcesOrigin EnergySantos

Opportunity: A larger NT economy, more jobs..

Success • $236m pa increase in revenue• ~$0.7b in NPV terms

Aspirational• $460m pa increase in revenue• ~$1.0b in NPV terms

And a new revenue source for Territorians..

Lasting regional opportunities

Land impact: surface footprint

Then

Now

The Berwyndale field has been developed to minimise the impact on farm productivity.

Lauren field was developed during the drought years, in a manner that fitted both the landholder and the gas company at the time.

NT SA Qld Texas

Area (‘000 sq Km) 1,349 979 1,731 696

Gross Farm Product* ($Bn) 0.8 6.2 10.4 35.3

Onshore Petroleum Wells 262 2,772 7,093 218,556

A Case Study: Wells and Agriculture

*Source: 7503.0 - Value of Agricultural Commodities Produced, Australia, 2014-15; USDA Census of Agriculture 2012 Market Value of Ag Products; A$1=US$0.75;

Common claims need to be tested

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The way forward…

“…the Inquiry finds that there is no justification whatsoever for the imposition of a moratorium on hydraulic fracturing in the NT.”

Matthew Doman Director – South Australia / Northern Territory APPEA Limitedt +61 8 8943 0675m +61 421 888 858e mdoman@appea.com.auwww.appea.com.au

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