In AWE of Waitsia
Just hours after AWE Limited again recommended its shareholders to accept a bid from Mitsui, the company’s General Manager of WA Assets and Engineering hit the Petroleum Club stage to discuss some of the finer details of the Waitsia Gas Field.
The northern Perth Basin has been one of Western Australia's primary gas producing regions for more than 50 years. Discovered in September 2014, the Waitsia field is regarded as the most significant onshore conventional gas discovery in Australia for the last 40 years and has the capability to supply the domestic market with at least 100 TJ/d for more than ten years from conventional reservoirs.
Funny to think that it all started with a drill bit and a little luck.
“It just happened that the well was under budget and that the drill bit was in good condition, so a call was made to continue drilling.
"To our surprise, the drill bit dropped rapidly indicating excellent sandstone permeability, which was an outstanding result.
“Waitsia now ranked in the top five largest gas fields ever discovered onshore Australia," said Suzanne Hunt.
The Company announced in late December 2017 that Waitsia-4 produced its highest flow rate to date from the Waitsia gas field and one of the highest rates recorded onshore in Australia, achieving a maximum flow rate of 90 million standard cubic feet per day from the Kingia Sandstone.
“Being an onshore development close to existing pipeline infrastructure and facilities, Waistia will ensure that AWE becomes the low-cost producer in a healthy West Coast gas market,” continued Hunt.
These standout results haven’t gone unnoticed with AWE attracting suitors from China, Japan and Australia. At the time of this article, Mitsui’s bid outmanoeuvred lower offers from Mineral Resources and China Energy Reserve and Chemicals Group, obtaining the backing of AWE’s board and an independent expert who determined the in $600 million takeover offer ‘fair and reasonable’. It is a corporate play that is being eagerly followed by many across the industry.
While the board have been busy behind the scenes, Suzanne Hunt was quick to point out that it was business as usual onsite with AWE planning full field development, comprising of approximately 20 wells over an area of 50 square kilometres, which will have the potential to produce gas for more than two decades.
Along with the significant Waitsia project, AWE’s current portfolio includes high-quality production, development and exploration assets with a focus on regional opportunities.
AWE and its predecessors have successfully worked in the Mid-West region since the 1960s, developing numerous relationships with local farmers, service providers and community members over the years. The company remains conscious that its social licence and goodwill is earned through trust, openness and transparency and as such has a policy of employing locals to run its gas production facilities and using local businesses and support services whenever they can.
“AWE invested more than $16m in FY16 and more than $10m in FY17 into the Mid-West economy.
“Waitsia Stage 2 development is likely to inject significant funds into the local economy and employ many people during construction,” concluded Hunt.