Coal Seam, Shale and Tight Gas in Australia:
Resources Assessment and Operation Overview
2015
Upstream Petroleum Resources Working Group Report
to COAG Energy Council
November 2015
Contents
Introduction
Key points
Unconventional Gas Reserves/Resources
Scope and assumptions
Definitions
SPE PRMS
Resource potential by jurisdiction
References
Summaries:
Queensland
New South Wales
Victoria
Tasmania
South Australia
Western Australia
Northern Territory
2
3
4
4
4
5
6
6
7
16
20
22
23
27
30
Introduction
This report updates the 2014 report produced for the COAG Energy Council.
The significant changes from the 2014 report are:
 Increase in Queensland’s 2C resources from 0 PJ to 24 841 PJ.
 Increase in New South Wales’ 2P reserves from 2 619 PJ to 3 082 PJ and
2C resources from 4 128 PJ to 10 492 PJ,
 Increase in South Australia’s 2C resources from 5 395 PJ to 8 034 PJ.
Page 2
Key points
 Current booked coal seam gas reserves exceed current LNG contract
requirements
Current Queensland coal seam gas reserves allocated to LNG projects total 31.3 Tcf
(33 178 PJ) while contracted volumes total 26.2 Tcf (27 772 PJ) of gas. Arrow Energy
has an additional 10.8 Tcf (11 448 PJ) of currently uncommitted gas.
 Current drilling rates meet estimated required drilling rates for coal seam
gas wells
Current drilling rates are similar to projected required drilling rates so should be
sustainable in the longer term (see Figure 2.4).
 There is a risk of shortfall in the rate of gas supply due to production
capacity that is dependent on actual well production rates. The data
required to estimate the magnitude of the risk is not currently available to
Geoscience Australia
The contracted gas volumes and projected drilling rates set a critical period from late
2015 through early 2019 where the required production rate per well will be at an
average of between 400 000 and 500 000 cubic feet per day per well (if only gas
resources allocated to the projects are considered). It is not clear to Geoscience
Australia that production will be able to be sustained at this level for that duration
and we do not currently have access to the data required to assess the risk. However,
the analysis of historical CSG production rates in Queensland (Table 2.5) seems to
provide evidence for a positive outcome.
Page 3
Unconventional Gas Reserves/Resources
COMMERCIAL
SUB-COMMERCIAL
DISCOVERED PIIP
UNDISCOVERED PIIP
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
The following table is used to sum the reserves and resources presented in the sections on each
jurisdiction. This summation is not strictly arithmetically correct for reasons discussed below
but does give an indication of the overall resource potential.
PRODUCTION: 343 PJ in 2014
RESERVES
1P: 371 PJ
RESERVES
2P: 45 553 PJ
RESERVES
3P: 3 331 PJ
CONTINGENT RESOURCES
1C: 7 132 PJ
CONTINGENT RESOURCES
2C: 46 644 PJ
CONTINGENT RESOURCES
3C: 49 286 PJ
UNRECOVERABLE
PROSPECTIVE RESOURCES
Low Estimate: 60 000 PJ
PROSPECTIVE RESOURCES
Best Estimate: 702 000 PJ
PROSPECTIVE RESOURCES
High Estimate: 281 000 PJ
UNRECOVERABLE
NOTE: Not all jurisdictions have reported volumes for each category so totals will not be indicative of the
distribution of resources across each category
Table 1.1: Summary of Australia’s unconventional resources
Scope and assumptions
This report covers the potential for tight oil and gas, shale oil and gas and coal seam gas
sourced from publicly available data published by operating companies, States authorities and
other reporting bodies.
Resource data is not available for many prospective basins and formations, so the following
estimates of unconventional resources are likely to understate the potential. To become
reserves, however, these resources will need a commercially viable gas price, suitable
infrastructure and a market. It is probable that the majority of the resources, if proven to exist,
will not be produced for decades.
Unconventional resource potential from other resources such as oil shale, coal gasification or
methane hydrates has not been considered.
Definitions
Useful summaries of the types and setting of unconventional resources can be found in Chapter
1 of the ACOLA Report 6 Securing Australia’s Future – Engineering energy: unconventional gas
Page 4
production (see link in References) and in the Roadmap for Unconventional Gas Projects in
South Australia (see link in References) which also includes a brief description of the SPE PRMS
resource reporting system in Chapter 1.
The following definitions have been adopted in listing the prospective formations in each
jurisdiction:
Inactive – The formation may contain a resource but there is no current activity
Preliminary exploration – The formation is being actively explored
Under assessment – The formation is being tested for its ability to produce commercially
Producing – The formation is currently producing
SPE PRMS
The Society of Petroleum Engineers has published the Petroleum Resources Management
System (SPE PRMS) to standardise the reporting of petroleum reserves and resource volumes.
The reporting matrix lists reserves and resources by commercial uncertainty in the vertical
direction and technical uncertainty in the horizontal direction.
PRODUCTION
COMMERCIAL
SUB-COMMERCIAL
DISCOVERED PIIP
UNDISCOVERED PIIP
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
It should be noted that only petroleum that is developed or is part of a current development
project can be booked as reserves and petroleum that has been demonstrated to exist through
exploration and testing can be booked as a contingent resource; the remainder should be
booked as a prospective resource. There is a possibility that a contingent resource or a
prospective resource may never become recoverable due to cost or the limitations of
technology. A prospective resource may not exist at all as the assumptions used to predict its
existence may be found to be invalid.
RESERVES
1P
RESERVES
2P
RESERVES
3P
CONTINGENT RESOURCES
1C
CONTINGENT RESOURCES
2C
CONTINGENT RESOURCES
3C
UNRECOVERABLE
PROSPECTIVE RESOURCES
Low Estimate
PROSPECTIVE RESOURCES
Best Estimate
PROSPECTIVE RESOURCES
High Estimate
UNRECOVERABLE
Table 1.2: PRMS matrix
Resource estimates range from estimates of the number of methane molecules in all the rocks
in a basin, through estimates of the volume that could be produced without consideration of
technical factors and economics to the amount likely to be produced given current technology
Page 5
and commercial considerations. It is important to consider the nature of these different types
of estimates when looking at resources in the PRMS matrix.
A description of the definitions used in the system is on the SPE website (see link in
References). A non-technical guideline and the full guideline, including sections on estimation
of different types of unconventional resource are also available (see links in References).
Resource potential by jurisdiction
The body of the report presents data on unconventional resources in each onshore jurisdiction.
The unconventional resource potential section includes listings of the basins and formations
that are currently thought to be prospective, including the type(s) of resource thought to be
present and the current exploration and development status of the formation.
The reserves/resources section is a compilation of the reserves and resources, which are listed
according to Geoscience Australia’s best estimate of where they should be placed in the SPE
PRMS matrix. The totals are a summation of each of the categories of reserve or resource but it
should be noted that in many instances only data in the 2P Reserves, 2C Contingent Resources
and Best Estimate Prospective Resources categories have been provided.
The unconventional resource drilling activity section tabulates drilling activity.
The commentary section includes Geoscience Australia’s and States/NT’s observations on the
status of unconventional resources in the jurisdiction and any caveats that should be applied in
interpreting the data.
References
ACOLA Report 6 Securing Australia’s Future – Engineering energy: unconventional gas
Production
http://www.acola.org.au/PDF/SAF06FINAL/Final%20Report%20Engineering%20Energy%20June%202013.
pdf
DMITRE South Australia
http://www.petroleum.dmitre.sa.gov.au/__data/assets/pdf_file/0008/179621/Roadmap_Unconventional
_Gas_Projects_SA_12-12-12_web.pdf
EIA/ARI World Shale Gas and Shale Oil Resource Assessment
http://www.eia.gov/analysis/studies/worldshalegas/
SPE Guidelines for Application of the Petroleum Resources Management System
http://www.spe.org/industry/docs/PRMS_Guidelines_Nov2011.pdf
SPE Petroleum Resources Management System
http://www.spe.org/industry/docs/Petroleum_Resources_Management_System_2007.pdf
SPE Petroleum Resources Management System Guide for Non-Technical Users
http://www.spe.org/industry/docs/PRMS_guide_non_tech.pdf
Page 6
Queensland
Unconventional resource potential:
Basin/Formation
Laura Basin
Dalrymple Sandstone
Maryborough Basin
Maryborough Formation
Tiaro Coal Measures
Burrum Coal Measures
Clarence-Moreton Basin
Walloon Coal Measures
Surat Basin
Walloon Coal Measures
Bowen Basin
Black Alley Shale
Tinowon Formation
Moranbah Coal Measures
Baralaba Coal Measures
Fort Cooper Coal Measures
Rangal Coal Measures
Bandanna Formation
Eromanga Basin
Winton Formation
Toolebuc Formation
Birkhead Formation
Westbourne Formation
Poolowanna Formation
Cooper Basin
Toolachee Formation
Roseneath Shale
Epsilon Formation
Murteree Shale
Patchawarra Formation
Galilee Basin
Betts Creek Beds
Aramac Coal Measures
Bandanna Formation
Lake Galilee Sandstone
Adavale Basin
Log Creek Formation
Lissoy Sandstone
Cooladdi Dolomite
Georgina Basin
Arrinthrunga Formation
Inca Shale
Thorntonia Limestone
Beetle Creek Formation
Georgina Limestone
Mount Isa Superbasin
Lawn Hill Shale
Termite Range Formation
Riversleigh Siltstone
Styx Basin
Tight gas
Shale gas
CSG
Status



Inactive






Inactive
Inactive
Preliminary exploration

Under assessment

Producing





Preliminary exploration
Under assessment
Producing
Producing
Under assessment
Under assessment
Producing




*


















Inactive
Preliminary exploration
Inactive
Inactive
Inactive
Under assessment
Under assessment
Under assessment
Under assessment
Under assessment
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration






Inactive
Inactive
Inactive








Inactive
Inactive
Inactive
Inactive
Inactive




Preliminary exploration
Inactive
Preliminary exploration

Page 7

Styx Coal Measures
Ipswich Basin
Tivoli Formation
*Unconventional oil and gas potential

Preliminary exploration

Preliminary exploration
Table 2.1: Queensland unconventional resource potential
COMMERCIAL
SUB-COMMERCIAL
DISCOVERED PIIP
UNDISCOVERED PIIP
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
Reserves/Resources:
PRODUCTION: 336.5 PJ in 2014*
RESERVES
1P
RESERVES
2P: 42 434 PJ*
RESERVES
3P
CONTINGENT RESOURCES
1C: 936 PJ
CONTINGENT RESOURCES
2C: 24 841 PJ**
CONTINGENT RESOURCES
3C: 13 768 PJ
UNRECOVERABLE
PROSPECTIVE RESOURCES
Low Estimate: 5 554 PJ
PROSPECTIVE RESOURCES
Best Estimate: 174 719 PJ***
PROSPECTIVE RESOURCES
High Estimate: 22 068 PJ
UNRECOVERABLE
Source: *Queensland production and reserves statistics as at 31 December 2014, **Sourced from Santos, Origin
and QSG reports, see the reference list***ACOLA Report 6 Securing Australia’s Future – Engineering energy:
unconventional gas production (Bowen and Clarence-Moreton shale gas), EIA/ARI World Shale Gas and Shale Oil
Resource Assessment (Maryborough shale gas), Independent Expert’s Reports for Armour Energy Limited (Mount
Isa Superbasin) and for Drillsearch for ATP 940
Table 2.2: Queensland unconventional resources
Coal seam gas reserves have increased markedly from 2007 as drilling accelerated to prove up
reserves for the LNG projects as shown in Figure 2.1 (1 Tcf is approximately equal to 1000 PJ).
However, sustained drilling in the last three years has not seen significant changes in reserves,
except for the QCLNG project, which booked about 3 Tcf additional gas reserves in 2013. This is
consistent with the LNG operators’ drilling program, focusing on development activities (Figure
2.3).
Page 8
14
12
10
Reserves (Tcf)
8
6
4
2
0
1/1/2005
1/1/2007
GLNG
1/1/2009
QCLNG
1/1/2011
APLNG
1/1/2013
1/1/2015
Arrow
Figure 2.1: Queensland reserves growth in coal seam gas for LNG projects
Production/Forecasts:
The total annual gas production for the State was about 377 PJ in 2014 (40 PJ of conventional
gas and 337 PJ of coal seam gas, the equivalent of about 6 MT LNG). In contrast, the forecast
gas demand to supply the CSG LNG projects will be about 25 MT/a or almost 1400 PJ/a for a
total of 18.5 Tcf (19 400 PJ) of gas over the current contracts. This is shown by contract in
Figure 2.2, compiled from published LNG export volumes.
Page 9
Contracted volumes
30
Contracted volumes (MT/a)
25
20
15
10
5
0
GLNG
GLNG
APLNG
APLNG
APLNG
QCLNG
QCLNG
Figure 2.2: Contracted volumes by year for Queensland coal seam gas for LNG projects
Unconventional resource drilling activity:
Drilling activity has been high, in preparation for LNG exports. The number of wells drilled per
year and the cumulative total of coal seam gas wells are shown in the graph below (Figure 2.3).
Over the last three years, the drilling activity has focused on development wells. As a result, the
number of exploration and appraisal wells has significantly reduced, while development wells
have substantially increased.
Page 10
1600
8000
1400
7000
1200
6000
Number of wells per year
9000
1000
5000
800
4000
600
3000
400
2000
200
1000
0
Cumulative number of wells
Queensland CSG drilling activity
1800
0
1980
1985
1990
1995
2000
2005
2010
2015
Year
Exploration wells
Appraisal wells
Development wells
Cumulative wells
Figure 2.3: Well drilling rates and cumulative coal seam methane wells drilled (Queensland
Department of Natural Resources and Mines, July 2015)
In order to sustain the high rate of production required for the LNG projects, an equally high
rate of drilling will be required. The graph below shows the projected drilling for the LNG
projects, based on published data. This by far exceeds all other petroleum related activity in the
State.
Page 11
Queensland CSG drilling activity
18000
16000
Cumulative number of wells
14000
12000
10000
8000
6000
4000
2000
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Year
Projected drilling
Cumulative wells
Figure 2.4: Historic and proposed cumulative coal seam methane wells (Queensland
Department of Natural Resources and Mines, July 2015)
Commentary:
Coal seam methane reserves booked by the three CSG LNG projects along with contracted LNG
volumes are tabulated below. The current reserves appear to be sufficient to cover the current
contracts.
Project
APLNG1
GLNG2
QCLNG3
Arrow4
2P Reserves Tcf (PJ)
13.3 (14 098)
6.4 (6 784)
11.6 (12 296)
10.8 (11 448)
Contracted volume Tcf (PJ)5
8.6 (9 116)
7.0 (7 420)
10.6 (11 236)
-
1: 2P value, see http://www.originenergy.com.au/content/dam/origin/about/investors-media/docs/originenergy-2015-annual-reserves-report.pdf
2: 2P + 2C value. See http://www.santos.com/library/20215_2014_Reserves_Statement.pdf
3: 2P resource estimates from http://www.qgc.com.au/media/379539/qgcataglance_aug15.pdf
4: 2P value from Queensland Department of Natural Resources and Mines.
https://www.business.qld.gov.au/invest/investing-queenslands-industries/mining/resourcespotential/petroleum-gas-resources/petroleum-gas-statistics
5: Contract information from https://www.rlms.com.au/wp-content/uploads/2013/07/150804_JULY_Report.pdf
Table 2.3: Coal seam gas resources and LNG contracted volumes
While the reserves booked for APLNG and QCLNG exceed the resources required to fulfil the
contracts, the current reserves for the GLNG project may not be adequate to fulfil the
contracts. It seems likely that additional sources of gas may be required to meet contract
commitments. This was indicated in the Santos 2015 Report
Page 12
(http://www.santos.com/library/070515_Macquarie%20Australia_Conference_Presentation.pd
f ). The report stated (p14)




GLNG has an integrated gas supply portfolio of indigenous gas, Santos portfolio gas, third party
supply and gas storage
GLNG proved reserves grew by 22% and proved and probable reserves by 4% in 2014, primarily
due to positive re-assessments in the Fairview, Roma and Scotia fields
GLNG has secured up to 2,228 PJ of Santos portfolio and third party gas supply agreements
GLNG also has 1,202 PJ of 2C resources
The CSG LNG projects have also published projected drilling programs and these can be
combined with the contracted LNG volumes to estimate a required average production rate per
well. These are tabulated for the three projects in Table 2.4 in millions of cubic feet per well per
day.
QUARTER
2014 1Q
2014 2Q
2014 3Q
2014 4Q
2015 1Q
2015 2Q
2015 3Q
2015 4Q
2016 1Q
2016 2Q
2016 3Q
2016 4Q
2017 1Q
2017 2Q
2017 3Q
2017 4Q
2018 1Q
2018 2Q
2018 3Q
2018 4Q
2019 1Q
2019 2Q
2019 3Q
2019 4Q
2020 1Q
2020 2Q
2020 3Q
2020 4Q
2021 1Q
2021 2Q
2021 3Q
2021 4Q
2022 1Q
2022 2Q
2022 3Q
2022 4Q
GLNG
0.115
0.217
0.412
0.393
0.421
0.403
0.429
0.411
0.435
0.418
0.440
0.425
0.444
0.430
0.416
0.404
0.434
0.421
0.410
0.398
0.388
0.378
0.368
0.359
0.351
0.342
0.335
0.327
0.320
0.313
0.306
0.300
APLNG
0.390
0.371
0.433
0.411
0.634
0.605
0.578
0.553
0.531
0.510
0.491
0.473
0.457
0.441
0.427
0.414
0.401
0.389
0.378
0.367
0.357
0.348
0.338
0.328
0.319
0.311
0.302
0.295
0.288
0.281
QCLNG
0.290
0.275
0.262
0.250
0.565
0.536
0.510
0.486
0.465
0.445
0.427
0.410
0.395
0.380
0.367
0.355
0.343
0.332
0.322
0.312
0.303
0.295
0.287
0.279
0.272
0.265
0.258
0.252
0.246
0.241
0.235
0.230
0.225
0.220
0.216
0.211
TOTAL
0.132
0.125
0.119
0.113
0.284
0.298
0.453
0.433
0.451
0.433
0.501
0.483
0.476
0.461
0.456
0.442
0.438
0.426
0.415
0.404
0.405
0.395
0.386
0.378
0.370
0.362
0.355
0.348
0.341
0.334
0.328
0.322
0.316
0.311
0.306
0.301
Table 2.4: CSG production rates needed to fulfil LNG contracted volumes (mmscf/well per day)
The table shows that for the period 3Q 2015 to 1Q 2019, the production rate will need to be
maintained at between 0.4 and 0.5 million cubic feet per day per well across all three projects.
Within each project the required peak rate can be even higher.
While the projected drilling rate appears to be sustainable, based on drilling rates to date, the
estimation of required wells is only valid for a given productivity per well; that is, if the peak
production per well is less than anticipated or the production rate per well declines more
rapidly to a lower production “tail” with time, more wells will be required to meet the
Page 13
contracted volumes. The actual well productivity is only known after dewatering has been
completed and it is unlikely that this has occurred for the majority of coal seam gas wells for
the LNG projects. Limited data on well rates available in the public domain suggests “peak 7day average gas rate” of 0.65 million cubic feet per day per well with a median rate of 0.55
million cubic feet per day per well in the Berwyndale South Walloon Coal Measures
accumulation. The longer term sustained production rate is not known.
Origin presented that for wells that have been online for more than six months, the observed
maximum average well production rates were 2.1 TJ/d per well (equivalent to 2 mmscf/d per
well) for the Talinga project and 1.1 TJ/d (about 1 mmscf/d per well) for the Spring Gully
project, higher than its expectation of 1.2 TJ/d per well on average of its Phase 1 drilling
operation (see link below). These production rates appear to meet the required rates for the
contracted demand (Table 2.4). For the GLNG project, Santos stated that the performance of
Fairview wells continues to exceed expectations with average optimum gas capacity of 2.2
TJ/day per well. Roma wells are on line and are dewatering, supporting individual well capacity
of 0.5 TJ/day; Roma 02- 04-01 well are producing over 1 TJ/day. All this information is still
limited to the average peak production rates per well.
Half year
end
Santos
Origin
QGC
Total
Jun-05
0.532
0.165
0.187
0.299
Dec-05
0.570
0.453
0.017
0.485
Jun-06
0.635
0.504
0.248
0.504
Dec-06
0.782
0.509
0.688
0.439
Jun-07
0.753
0.596
0.703
0.449
Dec-07
0.765
0.533
0.781
0.582
Jun-08
0.737
0.640
0.818
0.473
Dec-08
0.678
0.734
0.468
0.436
Jun-09
0.553
0.761
0.566
0.441
Dec-09
0.906
0.623
0.910
0.517
Jun-10
0.918
0.614
0.736
0.527
Dec-10
0.863
0.896
0.854
0.620
Jun-11
0.845
0.866
0.727
0.584
Dec-11
0.786
0.837
0.664
0.555
Jun-12
1.045
0.884
0.744
0.614
Dec-12
0.852
0.876
0.700
0.582
Jun-13
0.856
0.731
0.658
0.544
Dec-13
0.887
0.613
0.405
0.457
Jun-14
0.708
0.425
0.216
0.307
Dec-14
0.511
0.243
0.264
0.274
Average
0.759
0.625
0.568
0.485
Table 2.5: Historical rates of CSG daily productions in Queensland (mmscf/well per day) (Data
source: Queensland Department of Natural Resources and Mines, July 2015). The relatively low
production rates of wells for all three projects in 2014 may be related to the de-watering
process of recent wells.
Longer term (10 years) sustained production rates can be obtained from the historical CSG
production data and numbers of producing wells available online from the Queensland
Department of Natural Resources and Mines (Table 2.5). The production rates from CSG
projects operated by Origin, QGC and Santos in general exceed 0.5 mmscf/day per well, with
the average rates of 0.625 mmscf/day, 0.568 mmscf/day and 0.759 mmscf/day, respectively.
Page 14
From these long term production rates, it seems that the CSG production rates would be
adequate for fulfilling the committed contracts (Table 2.4).
References:
Armour Energy
http://www.armourenergy.com.au/investors/investment-research (7-August-2013)
Beach Energy for ATP 588
http://www.beachenergy.com.au/IRM/Company/ShowPage.aspx/PDFs/398510000000/NTNGContingentResources
Independent Expert’s Report for Armour Energy Limited
http://www.empireenergy.com/pdf/McArthur%20Basin%20Armour%20Co%20Ltd%20Ind.%20Geo's%20R
eport.pdf
Origin APLNG Operational Review and Asset Visit (May 2014)
https://www.originenergy.com.au/content/dam/origin/about/investors-media/docs/june-2015-quarterlyproduction-report-consolidated-31072015.pdf
BG Group’s LNG business:
http://www.qgc.com.au/media/379539/qgcataglance_aug15.pdf
Queensland production and reserves statistics December 2014
https://www.business.qld.gov.au/invest/investing-queenslands-industries/mining/resourcespotential/petroleum-gas-resources/petroleum-gas-statistics
Resource and Land Management Services, Eastern Australia Upstream Gas Report July 2015
https://www.rlms.com.au/wp-content/uploads/2013/07/150804_JULY_Report.pdf
Santos 2014 Reserves Statement
http://www.santos.com/library/20215_2014_Reserves_Statement.pdf
Santos GLNG contracted resources and well production rates
http://www.santos.com/library/2014_09_15_%20CLSA%20presentation.pdf (pages 113-14)
Page 15
New South Wales
Unconventional resource potential:
Basin/Formation
Tight gas

Clarence-Moreton Basin*
Walloon Coal Measures
Ipswich Coal Measures
Nymboida Coal Measures
Surat Basin
Walloon Coal Measures
Gunnedah Basin*

Black Jack Formation

Maules Creek Formation
Sydney Basin*

Narrabeen Group

Bulgo Sandstone

Colo Vale Sandstone

Illawarra Coal Measures

Wittingham Coal Measures

Newcastle Coal Measures

Tomago Coal Measures

Greta Coal Measures

Shoalhaven Group

Clyde Coal Measures

Gloucester Basin*

Gloucester Coal Measures

Ashford Basin

Ashford Coal Measures

Darling Basin

Murray Basin

Oaklands Basin

Eromanga Basin
*: the basins with identified petroleum resources
Shale gas
CSG
Status




Preliminary exploration
Inactive
Inactive


Preliminary exploration























Preliminary exploration
Preliminary exploration





Inactive
Inactive
Inactive
Producing
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Inactive
Inactive









Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Table 3.1: New South Wales unconventional resource potential
Page 16
PRODUCTION: 6.2 PJ/a
COMMERCIAL
SUB-COMMERCIAL
DISCOVERED PIIP
UNDISCOVERED PIIP
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
Reserves/Resources:
RESERVES
1P: 371 PJ
RESERVES
2P: 3 082 PJ
RESERVES
3P: 3 331 PJ
CONTINGENT RESOURCES
1C: 2 422 PJ
CONTINGENT RESOURCES
2C: 10 656 PJ
CONTINGENT RESOURCES
3C: 16 913 PJ
UNRECOVERABLE
PROSPECTIVE RESOURCES
Low Estimate
PROSPECTIVE RESOURCES
Best Estimate
PROSPECTIVE RESOURCES
High Estimate
UNRECOVERABLE
Table 3.2: NSW Reserves/Resources, September 2015, compiled from public sources
Production/Forecasts:
The only unconventional gas produced in NSW is from AGL’s Camden Gas Project, which
produces about 5% of the State’s gas supply, averaging approximately 6.2 PJ per annum.
NSW currently consumes approximately 162 PJ per annum of natural gas (NSW Parliamentary
Research Service, 2014).
No significant increases in production are forecast in the short term but applications have been
submitted to the NSW Department of Planning for AGL’s Gloucester Gas Project and Santos’
Narrabri Gas Project. A further CSG project, Metgasco’s West Casino Gas Project, is also in
early stages of planning.
Gloucester Gas Project
The Gloucester Gas Project proposes to produce 20 PJ to 30 PJ per annum for a period of up
to 30 years. The project area currently has 98 PJ of 1P reserves, 462 PJ of 2P reserves and 632
PJ of 3P reserves estimated (AGL, 2015).
Planning approval for the Stage 1 of the Gloucester Gas Project was granted in 2011, which
includes the construction and operation of up to 110 wells and associated infrastructure.
Limited work has been undertaken and AGL is currently undertaking extended flow testing on
the Waukivory Pilot.
AGL’s have indicated their final investment decision (FID) is expected in 2016 and the project
could be operating by 2018.
Narrabri Gas Project
The Narrabri Gas project proposes to produce up to 73 PJ per annum for a period of up to 25
Page 17
years. The Narrabri Project currently has 106 PJ of 1P reserves, and 1141 PJ of 2P reserves
certified (Santos, 2014).
The project proposes the construction and operation of approximately 850 individual
production wells from a maximum of 425 well sets, with a target production peak rate of
approximately 200 terajoules (TJ) per day.
Santos has submitted a project proposal to the NSW Department of Planning and was issued
with Secretary Requirements (SEARs) in July 2014. The Environmental Impact Assessment is
currently being finalised by Santos and at this stage there is no forecast for when the Narrabri
Gas Project will be operating.
West Casino Gas Project
The West Casino Project currently has 4428 PJ of 2C resources.
The West Casino Gas Project is still in development, and a project application has not yet been
submitted to the NSW Department of Planning for approval. The project is indicated to
comprise the construction and operation of approximately 40 horizontal wells for up to 20
years of production.
At this stage there is no estimate as to when the project will commence operation, however
Metgasco field operations have been suspended since 2013.
Unconventional resource drilling activity:
The unconventional drilling activity in the State is currently low. No petroleum wells have been
drilled in 2015 in NSW to date.
Figure 3.1: Unconventional Petroleum Wells from 2000 to 2015 (NSW Department of Resources
and Energy, August 2015)
Page 18
Commentary:
In addition to the coal seam gas resources identified to date, conventional, tight gas and shale
gas resources may also be present. It is difficult to confidently delineate the extent of most of
the potential petroleum resources in the State due to sparse exploration data. Conventional
petroleum exploration in NSW is limited, and currently only covers some areas in the ClarenceMoreton Basin.
References:
AGL, 2015, ASX annual reserves assessment 12/8/15.
http://www.asx.com.au/asxpdf/20150812/pdf/430g0dtq7yl7pj.pdf
Metgasco, 2015, Metgasco 2014 Annual Report,
http://www.metgasco.com.au/asx-announcements/2014-annual-report
NSW Parliamentary Research Service, 2014, A tightening gas market: supply, demand and price
outlook for NSW. Briefing Paper No 4/2014 by Andrew Haylen.
http://www.parliament.nsw.gov.au/prod/parlment/publications.nsf/key/Atighteninggasmarket:supply,de
mandandpriceoutlookforNSW
Santos, 2014, December 2014 Annual Report to ASX,
www.santos.com/library/2014_Annual_Report.pdf
Page 19
Victoria
Unconventional resource potential:
Basin/Formation
Tight gas
Shale gas
CSG
Gippsland Basin
Lakes Entrance Formation
*

Strzelecki Formation
*
Otway Basin

Pretty Hill Formation


Sawpit Shale

Casterton Formation
*
*Unconventional oil and gas potential
**Activities suspended due to current State moratorium on fracture stimulation.
Status
Inactive
Under assessment**
Inactive
Preliminary exploration
Preliminary exploration
Table 4.1: Victorian unconventional resource potential
PRODUCTION
COMMERCIAL
SUB-COMMERCIAL
DISCOVERED PIIP
UNDISCOVERED PIIP
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
Reserves/Resources:
RESERVES
1P
RESERVES
2P
RESERVES
3P
CONTINGENT RESOURCES
1C: 403 PJ
CONTINGENT RESOURCES
2C: 755 PJ
CONTINGENT RESOURCES
3C: 1 212 PJ
UNRECOVERABLE
PROSPECTIVE RESOURCES
Low Estimate
PROSPECTIVE RESOURCES
Best Estimate: 452 PJ*
PROSPECTIVE RESOURCES
High Estimate
UNRECOVERABLE
Source: Lakes Oil, includes Wombat, Trifon, Gangell and North Seaspray tight gas except for *Wombat only
Table 4.2: Victorian unconventional resources
Production/Forecasts:
None.
Unconventional resource drilling activity:
None.
Page 20
Commentary:
The difficulties of developing the tight gas resource in proximity to ample supplies of
conventional gas offshore have been compounded by the recent moratorium on fracture
stimulation which will be required to prove the commercial viability of these reservoirs. This
has provided little incentive to explore further in the region.
References:
Lakes Oil website
http://www.lakesoil.com.au/index.php/reports-and-announcements/category/announcements-2010
10-August-2010
http://www.lakesoil.com.au/index.php/reports-and-announcements/category/announcements-2009
1-July-2009
Page 21
Tasmania
Unconventional resource potential:
Basin/Formation
Tight gas
Shale gas
CSG
Tasmania Basin
Woody Island Formation
*+
*+
+
*Unconventional oil and gas potential nature of resources yet to be determined
Status
Inactive
Table 5.1: Tasmanian unconventional resource potential
Reserves/Resources:
None.
Production/Forecasts:
None.
Unconventional resource drilling activity:
None.
Commentary:
While there is prospectivity for both conventional and unconventional resources in Tasmania,
there have been no discoveries and limited exploration undertaken to date.
References:
The Tasmania Basin – Gondwanan Petroleum system
http://www.mrt.tas.gov.au/mrtdoc/tasxplor/download/02_4832/Tasmaniax.pdf
Page 22
South Australia
Unconventional resource potential:
Basin/Formation
Tight gas
Shale gas
CSG
Status
Eromanga Basin

Winton Formation
Inactive**
Cooper Basin


Toolachee Formation
Under assessment***

Roseneath Shale
Under assessment***

Epsilon Formation
Under assessment***

Murteree Shale
Under assessment***



Patchawarra Formation
Under assessment***
Warburton Basin

Pando Formation
Inactive



Dullingari Group
Inactive



Kalladeina Formation
Inactive


Mooracoochie Volvcanics
*
Inactive
Pedirka Basin

Purni Formation
Inactive
Simpson Basin

Peera Peera Formation
Inactive
Officer Basin

Observatory Hill Formation
*
Inactive


Ouldburra Formation
Inactive


Narana Formation
Inactive


Dee Dee Mudstone
Inactive
Arckaringa Basin

Mount Toondina Formation
Preliminary exploration
Stuart Range Formation
*
Preliminary exploration
Otway Basin

Pretty Hill Formation
Inactive


Sawpit Shale
Preliminary exploration

Casterton Formation
*
Preliminary exploration
*Unconventional oil and gas potential
**Preliminary exploration showed coal thickness and gas content currently below commercial thresholds
***Minor production
Table 6.1: South Australian unconventional resource potential
The nature of these resource plays is fully described in Chapters 2 and 4 of the Roadmap for
Unconventional Gas Projects in South Australia.
Page 23
PRODUCTION
COMMERCIAL
SUB-COMMERCIAL
DISCOVERED PIIP
UNDISCOVERED PIIP
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
Reserves/Resources:
RESERVES
1P
RESERVES
2P
RESERVES
3P
CONTINGENT RESOURCES
1C: 3 371 PJ*
CONTINGENT RESOURCES
2C: 8 034 PJ*
CONTINGENT RESOURCES
3C: 17 393 PJ*
UNRECOVERABLE
PROSPECTIVE RESOURCES
Low Estimate: 54 024 PJ**
PROSPECTIVE RESOURCES
Best Estimate: 123 034 PJ**
PROSPECTIVE RESOURCES
High Estimate: 259 211 PJ**
UNRECOVERABLE
Source: *Roadmap for Unconventional Gas Projects, pages 89-111, Santos, Beach Energy, Senex and Strike Reports,
(see reference links in page 25)
** As for * plus Drillsearch report
Table 6.2: South Australian unconventional resources
Production/Forecasts:
Minor production from recent shale gas exportation wells.
Santos plan “material commercial shale production and reserve bookings by 2015/16
underpinning Cooper development beyond 2020” suggesting larger scale production by the end
of the decade (Santos Cooper Basin Unconventional Gas Opportunities and Commercialisation).
The challenges associated with accelerating shale gas production are described at pages 158
and 159 of the Roadmap for Unconventional Gas Projects in South Australia (see link below).
Beach Energy, Drillsearch and Senex are also actively exploring the Roseneath-Epsilon-Murteree
and Patchawarra resources while Beach Energy and Strike Energy are assessing coal seam gas
potential in the southern Cooper Basin. Beach booked 2C unconventional resources of 1.964 Tcf
of gas for PRLs 33 to 48 (see the link below). Contingent unconventional gas resources totalling
more than 8 Tcf have been identified in the South Australian Cooper Basin by the Cooper Basin
Joint Venture (operated by Santos), Beach Energy and Senex Energy, which is more than the
total sales gas production from the Basin to date. Cooper Energy is investigating the shale gas
potential of the Otway Basin. There is no production forecast associated with this activity.
Unconventional resource drilling activity:
Moderate.
Explorers have accelerated appraisal of Cooper Basin unconventional plays since the first
exploration well to test these plays was drilled in 2010 (Table 6.2). Following on from 13 vertical
Page 24
wells to test unconventional gas plays in 2012 and 2013, 6 wells were drilled during 2014 (Table
6.2).
Year
2010
2011
2012
2013
2014
No. of Wells Drilled
2
2
13
13
6
Source: Department of State Development, South Australia
(http://www.petroleum.statedevelopment.sa.gov.au/prospectivity/basin_and_province_information/unconvention
al_gas/cooper_basin_unconventional_wells)
Table 6.3. Number of wells targeting natural gas in unconventional reservoirs, SA.
Commentary:
Over 700 fracture stimulations have been undertaken in the Cooper Basin since production
commenced in 1969. Some of these stimulations were in tight sandstones in the REM and
Patchawarra Formation sequence that contain the shale gas and coal seam gas resources.
Better than expected well performance suggests that these wells have been producing from the
unconventional reservoirs adjacent to the tight sands.
The potential from these reservoirs is very large. Morton (1998) has estimated that the Cooper
Basin source rocks have the potential to have generated between 4 027 and 8 055 Tcf of gas
although only a small portion of that could reasonably be regarded as a resource.
With regard to the timing of production, although three unconventional wells (Moomba 191,
193H and 194) have been producing for over two years, no reserves for unconventional
petroleum have been reported in South Australia. It is unlikely that substantial volumes of gas
from this resource will be available to the gas market in the short term.
References:
Beach Energy 2015 Reserves and Contingent Resources Statement
http://www.beachenergy.com.au/IRM/Company/ShowPage.aspx/PDFs/432710000000/1P2P3PReservesand2CContingentResourcesat30Jun15
Morton, J.G.G., 1998. Undiscovered petroleum resources. In: Gravestock, D.I., Hibburt, J.E. and
Drexel, J.F. (eds) The Petroleum Geology of South Australia, Volume 4: Cooper Basin.
South Australian Department of Primary Industries and Resources. Report Book 203-09
Roadmap for Unconventional Gas Projects in South Australia
http://www.pir.sa.gov.au/petroleum/prospectivity/basin_and_province_information/unconventional_gas
/unconventional_gas_interest_group/roadmap_for_unconventional_gas_projects_in_sa
Santos Cooper Basin Unconventional Gas Opportunities & Commercialisation
http://www.santos.com/library/121112_EABU_Cooper_Basin_Unconventional_Gas_Opportunities_and_
Commercialisation.pdf
Santos Cooper Basin and GLNG Investor Presentation
http://www.santos.com/library/2015_Cooper_and_GLNG_Investor_Visit.pdf
Page 25
Senex Energy
http://www.senexenergy.com.au/files/682/Major-contingent-gas-resource-upgrade-to-55-Tcf.pdf
Strike Energy
http://www.strikeenergy.com.au/wp-content/uploads/2015/07/20150729-DUG-July-2015Presentation.pdf
Page 26
Western Australia
Unconventional resource potential:
Basin/Formation
Tight gas
Northern Perth Basin
Yarragadee Formation
Kockatea Shale
Dongara/Wagina Sandstone
Carynginia Formation
Irwin River Coal Measures
High Cliff Sandstone
Southern Perth Basin
Sue Coal Measures
Carnarvon Basin
Wooramel Group
Byro Group
Canning Basin
Laurel Formation

Goldwyer Formation
Bonaparte Basin
Milligans Formation
“Bonaparte Formation”
*Unconventional oil and gas potential
Shale gas
Shale Oil
















Status
Under assessment
Under assessment
Producing
Preliminary exploration
Preliminary exploration
Under assessment
Inactive




Inactive
Inactive



Under assessment
Preliminary exploration
Inactive
Inactive
Table 7.1: Western Australian unconventional resource potential
COMMERCIAL
SUB-COMMERCIAL
DISCOVERED PIIP
UNDISCOVERED PIIP
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
Reserves/Resources:
PRODUCTION: 0.143 PJ in 2014
RESERVES
1P
RESERVES
2P: 37 PJ
RESERVES
3P
CONTINGENT RESOURCES
1C:
CONTINGENT RESOURCES
2C: 2 358 PJ
CONTINGENT RESOURCES
3C
UNRECOVERABLE
PROSPECTIVE RESOURCES
Low Estimate
PROSPECTIVE RESOURCES
Best Estimate 146 400 PJ
PROSPECTIVE RESOURCES
High Estimate
UNRECOVERABLE
Sources: 1AWE, Norwest Energy, Transerv, Warrego; Whicher Range Energy; 2DMP; 3EI, assuming recovery factor of
10% for the in place prospective resource. Production data is sourced from “Petroleum in Western Australia,
September 2015”.
Table 7.2: Western Australian unconventional resources
Page 27
Production/Forecasts:
Currently the only unconventional play producing is the Corybas tight gas field.
Unconventional resource drilling activity:
Moderate.
Since 2005 towards end 2015, 17 exploration wells have been drilled to search for shale and
tight gas resources in Western Australia. Seven of these involved hydraulic fracturing to test the
capacity of the reservoir to generate commercial gas flows
Commentary:
Western Australia is considered to hold significant shale and tight gas resources in the
Kimberley, East Pilbara and Midwest regions. Department of Mines and Petroleum, Western
Australia, has shown that the state potentially contains an estimated 1 380 Tcf in place
resources of shale and tight gas. Of this, approximately 980 Tcf are in the Canning Basin
(Kimberley and East Pilbara regions); 220 Tcf are in the north Perth Basin (Midwest region); and
95 Tcf are in the Northern Carnarvon Basin (onshore).
The US EIA estimated shale oil volumes on the Perth and Canning basins, while tight gas
estimates have been made by various explorers of their discoveries.
The Canning Basin is recognised as having great potential, if only for the vast size of the basin.
Prospective formations have great areal extent although the extent of unconventional
resources within them is currently unknown. Resource estimates assessing the whole of a
formation across the basin should, therefore, be suitably discounted for this uncertainty. Due
to the remoteness of the basin, transport and infrastructure will also be a significant issue in
any unconventional resource development.
The Northern Perth Basin, however, is however better placed near markets, infrastructure and
pipelines and is more likely to see unconventional gas reach market first. It also holds the only
tight gas fields currently progressed to the contingent stage of exploration.
If exploration in Western Australia proves successful, significant commercial production is
anticipated to be five to 10 years away.
References:
AWE, 2015 FY Results
http://www.asx.com.au/asxpdf/20150824/pdf/430qsl14xdf35p.pdf
AWE, Corybas update
http://www.asx.com.au/asxpdf/20110504/pdf/41yg4fjlsn4lyh.pdf
DMP, 2014 Natural Gas from Shale and Tight Rocks
http://www.dmp.wa.gov.au/documents/Natural_Gas_from_Shale_and_Tight_Rocks_An_overview_of_Western_Australia_regulatory_framework.pdf
Page 28
DMP, Western Australian Atlas of Petroleum Fields, Vol. 1, Onshore Perth Basin, Owad-Jones,
D. and Ellis, G., 2000
DMP, Western Australia Atlas of Petroleum Fields, Volume 2, Part 1, Onshore Canning Basin,
Jonasson, K.E., 2001
DMP, Western Australia Atlas of Petroleum Fields, Volume 2, Part 2, Onshore Carnarvon Basin,
Ellis, G.K. and Jonasson, K.E., 2001
DMP, Petroleum in Western Australia, September 2015, Western Australian Gas Reserves and
Resources, Triche, N.E and Middleton, M., 2015
EIA, Technically Recoverable Shale Oil and Shale Gas Resources: an Assessment of 137 Shale
Formations in 41 Countries Outside the United States, U.S. Energy Information
Administration, 2013
Norwest, Arrowsmith update
http://www.norwestenergy.com.au/home/project-arrowsmith/duplicate-of-australia/ep413/
Triche NE and Middleton M, 2015, Western Australian Gas Reserves and Resources, PWA Sept
2015
Warrego, West Erregulla update
http://www.warregoenergy.com/news/index.cfm?id=5
Transerv, Warro update
http://www.transerv.com.au/wp-content/uploads/2015/07/StockAnalysis-Special-Edition-on-TSV-30-July2015.pdf
Whicher Range Energy, Whicher Range update
http://www.whicherenergy.com/index.php?option=com_content&view=article&id=60:developmentconc
ept&catid=37:ep408&Itemid=69
Page 29
Northern Territory
Unconventional resource potential:
Basin/Formation
Onshore Bonaparte Basin
Milligans Formation
“Bonaparte Formation”
Georgina Basin
Arthur Creek Formation
Thorntonia Limestone
Chabalowe Formation
McArthur Basin/Beetaloo Sub-basin
Kyalla Formation
Velkerri Formation
Barney Creek Formation
Coxco Dolostone
Bessie Creek Sandstone
Moroak Sandstone
Tawallah Group
Wollagorang Shale
McDermott Formation
Mount Isa Superbasin
Lawn Hill Shale
Riversleigh Siltstone
Amadeus Basin
Pacoota Sandstone
Horn Valley Siltstone
Stairway Sandstone
Eromanga Basin
Toolebuc Formation
Oodnadatta Formation
Tight gas
Shale gas




Inactive
Preliminary exploration




















Preliminary exploration
Preliminary exploration
Inactive


Preliminary exploration
Preliminary exploration
















Inactive
Inactive





Pedirka Basin
Peera Peera Formation
Purni Formation
Ngalia Basin
Mount Eclipse Sandstone
Wiso Basin
Montejinni Limestone

CSG
Status
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Preliminary exploration
Inactive
Inactive


Inactive
Preliminary exploration
Inactive
Inactive
Table 8.1: Northern Territory unconventional resource potential
Page 30
PRODUCTION
COMMERCIAL
SUB-COMMERCIAL
DISCOVERED PIIP
UNDISCOVERED PIIP
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
Reserves/Resources:
RESERVES
1P
RESERVES
2P
RESERVES
3P
CONTINGENT RESOURCES
1C
CONTINGENT RESOURCES
2C
CONTINGENT RESOURCES
3C
UNRECOVERABLE
PROSPECTIVE RESOURCES
Low Estimate
PROSPECTIVE RESOURCES
Best Estimate: 257 276 PJ
PROSPECTIVE RESOURCES
High Estimate
UNRECOVERABLE
Source: Munson (2014)
Table 8.2: Northern Territory unconventional resources
Production/Forecasts:
None
Unconventional resource drilling activity:
The number of wells drilled for unconventional resource exploration since 2011 are shown in
Table 8.3 and Figure 8.1
Year
No. of Wells Drilled
2
2011
5
2012
10
2013
12
2014
Table 8.3: Number of unconventional wells drilled since 2011
Page 31
Number of Unconventional Gas Wells Drilled per Year
14
12
Wells drilled
10
8
6
4
2
0
2011
2012
2013
2014
Figure 8.1: Unconventional gas wells drilled in Northern Territory since 2011
Commentary:
The rapid uptake of acreage in the Northern Territory is an indication of the interest in the
prospectivity of the basins in this region. There have been widespread indications of petroleum
during petroleum and stratigraphic drilling, and mineral exploration over many years. Some
operating companies are currently following up these indications, notably Armour Energy in the
Glyde Sub‐basin of the McArthur Basin. Santos, Origin Energy and Sasol, and Pangaea
Resources are actively investigating shale plays in the Beetaloo Sub-basin.
At this stage there is no production from the unconventional gas resources in the Northern
Territory. Unconventional gas exploration is still at its early stage.
References:
Munson TJ, 2014. Petroleum geology and potential of the onshore Northern Territory,
2014. Northern Territory Geological Survey, Report 22
Page 32