Australian Projects

Canning Basin, Western Australia
Emerald Interest 12.75% to 100%
Emerald has secured a commanding contiguous exploration acreage position in excess of 14,000 square kilometres in the Canning Basin in Western Australia, covering the highly prospective Pinnacle Fault trend (approximately 225 km in length).  Emerald's acreage now includes the entire western section of the fault onshore and its offshore extension.
The Pinnacle Fault is a key structural element between the Fitzroy Sub-Basin and the Lennard Shelf.  It is believed to be the conduit for oil and gas migration from the Fitzroy Sub-Basin into structural and stratigraphical traps on the adjacent Lennard Shelf to the north.
In view of the successful discovery of porous Devonian “reefal” reservoir rocks in the Stokes Bay 1 well at EP104/R1, Emerald believes there is significant potential to discover several similar prospects along the western extension of the Pinnacle Fault (see map below). 

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Canning Basin showing Emerald’s EP104 / R1 (pale yellow, Emerald 12.75%) and EPA 4/05-6 (green, Emerald 100%) interests, and mapped prospects and leads.  The new EP 463/TP24 (Lacapede Islands) and WA-419-P blocks (Emerald 100%) are shown in yellow.  The main feature on all leases is the Pinnacle Fault, the conduit for much of the previous hydrocarbon production on the Lennard Shelf portion of the Canning Basin.
Emeralds current tenement holdings in the Canning Basin are:

Exploration Permit/Retention Licence/Applications	Emerald Net Working Interest	Permit Size (approx sq km)
EP 104 (R5)	12.75%	700
Retention Lease R1	12.75%	290
Application L98-1 (option)	12.75%	200
Application EP 4/05-6	100%	4,600
EP463	100%	200
TP24	100%	400
WA-419-P	100%	8,000
Total		14,390

EP104/R1 (12.5% WI) - Onshore Western Australia
Emerald farmed into three permits in the Canning Basin, Western Australia (EP104 (R4), Retention Lease R1 and L-98-1 Application) in 2007, through a consortium headed by Empire Oil and Gas NL (through its wholly owned subsidiary, Gulliver Productions Pty Ltd).
Two wells, Valentine 1 and Stokes Bay 1, were subsequently drilled.

Valentine 1 Well
Valentine 1 is located approximately 20 kilometres north of the township of Derby in northwest Western Australia's Kimberley region. The primary reservoir objective was the Late Devonian-aged Virgin Hills Formation.
ARC Energy drilled Valentine 1 vertical well to a total depth of 3,430 metres in September - October 2007.
The well intercepted very strong gas shows and indications of porosity in the Anderson and Laurel Formations down-dip from the target interval in the Stokes Bay #1 well. This is an extremely positive indication for Stokes Bay #1 which was targeted to intersect these objectives within closure, some 90 meters up-dip from the Valentine #1 intersection.


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Figure 3: The Century 18 rig on location at the EP104/R1 project in the Canning Basin of Western Australia during drilling of the Valentine 1 and Stokes Bay 1 wells.

EP 104/R1 STOKES BAY 1 WELL
The Stokes Bay 1 well was drilled as a sidetrack from the Valentine 1 wellbore after the completion of drilling operations at Valentine 1. Stokes Bay 1 was a test of the extent and reservoir development of the gas accumulation intersected by the Point Torment 1 well drilled in 1992. It was drilled as a deviated well with a final total depth of 2,777 metres below 7 inch casing.
The revised total depth was to test the gas potential of the Nullara reefal carbonates following gas shows in Valentine-1 well. Pressure gradient studies indicate that the Nullara reefal carbonates could be hydrocarbon-bearing.

Stokes Bay Showline
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The well was suspended after large volumes of drilling mud were lost in what is believed to be a cavernous reef system in the Nullara Formation.  Since then, two attempts were made by the Operator, Buru Energy Limited, to induce flow in the well and to obtain a gas sample.  Both attempts failed. However wellhead pressures of 1200 psi and gas accumulation in the well bore re-occurred after each attempt.
Emerald is currently awaiting advice from Buru Energy regarding further well activities to determine if the Stokes Bay well is a potentially commercial gas discovery.  Emerald intends to work with Buru and other joint venture participants to clarify a way forward.
EPA 4/05-6 (100% WI and Operator) - Onshore Western Australia
Emerald’s application EPA 4/05-6 lies immediately to the west of the EP104 permits.   The current status is
that Emerald is the “preferred applicant” and the Company is currently proceeding through the Native Title process. 

The permit covers a significant extension of the Pinnacle Fault to the west of the EP104/R1 permit and includes several structures similar to that intersected at Stokes Bay mapped from existing seismic data.  Emerald’s mapping of leads and prospects on EPA 4/05-6 both along and near the Pinnacle Fault have identified several large structures that may host significant accumulation of hydrocarbons.

The leads are enhanced by a high quality Devonian sandstone reservoir of 43 metres thickness identified at the nearby Puratte 1 well. Emerald considers its prime targets on this permit to be the Isabel and Anna Ford Leads, which lie on the downside of the Pinnacle Fault and ideally placed for charge from the Fitzroy Trough source kitchens. They are four way dip-closed anticlines with the potential for charged reservoirs in the Carboniferous Anderson Formation, and the Devonian Puratte sand. An east-west seismic line through Isabel Lead is illustrated here.

Isabel has an areal closure of 25-30 square kilometers (6000– 7400 acres).  A large carbonate reefal lead of approximately 45 square kilometers (11,000 acres) has also been identified on the Lennard Shelf portion of the permit.

 

EP463 & TP24 (Lacepede Islands) - Offshore WA State
WA-419-P - Offshore Commonwealth
In December, 2008, Emerald was awarded 8600 square kilometres of contiguous in state and Commonwealth areas. Since then, Emerald progressed in-house work to characterise leads and prospects in its strategic holdings along the structurally significant Pinnacle Fault zone. 
Woodside Petroleum Limited was awarded the three adjacent Commonwealth blocks to the South and West of Emerald's acreage and unsuccessfully bid for the block awarded Emerald as WA-419-P. Woodside is the major participant and Operator of the Browse LNG Project likely to be developed at James Price Point, located approximately 80 kilometres South of Emerald's permits.  If the LNG development proceeds as planned, this would significantly increase the potential commerciality of any significant gas discovery in the area.
Emerald is also evaluating potential of its acreage for CO2 geosequestration.  Major gas discoveries for all of the potential LNG developments in the Browse Basin contain significant quantities of CO2 which will need to be removed in the LNG process and sequestered to avoid greenhouse gas emissions.  Legislation is in place to enable  geosequestration in offshore Commonwealth areas and existing petroleum tenement holders are accorded certain preferential rights in respect of geosequestration potential in their areas of tenure.
These permits were awarded to Emerald on December 11th 2008, with mainly seismic processing and acquisition commitments in the initial obligatory permit years.

Emerald's offshore permits lie on the “producing” Pinnacle Fault trend of the Canning
Basin where the Blina Field has produced 2 million barrels of oil. Emerald’s mapping of leads and prospects both along and near the Pinnacle Fault has identified several large structures, namely Claire Lead, Emma Lead and Chachi Lead. Claire and Chachi are illustrated here.

Claire Lead
Please click on image to enlarge.

Claire is a large (35 square kms 8,600 acre) four way dip closed anticline at the foot of the Pinnacle Fault, and is in a favourable position for charge from the source kitchens of the Fitzroy Trough. This prospect straddles WA 419P and EP463/TP24.

A key target will be the “Puratte Sand”, a high quality 43-meter sand identified onshore in the Puratte 1 well, with secondary targets being the sandstone reservoirs of the Permian Grant Formation, and the Carboniferous Anderson Formation.

Chachi Lead
Please click on image to enlarge

Chachi Lead is an elongate horst-block (more than 30 kilometers in length) which is an early structure which has been wrench-induced and rejuvenated in the Neogene. The lead has a major footprint on the aeromagnetic data across this area. There are excellent sandstone reservoirs in the Tithonian (Jurassic) in the nearby Lacepede1A well, and these would be the principal target. Secondary targets would be Permian clastics, and Devonian carbonates.

Emerald is also evaluating the Permit areas to assess their potential for CO2 sequestration, should the Browse Basin LNG projects be located on the nearby Kimberley coast.