Gippsland Basin

General

Situated offshore and onshore southeastern Australia, the Gippsland Basin contains some 21 oil and gas fields currently in production, including Australia's largest oil discovery to date, the Kingfish field. The offshore petroleum exploration permit Vic/P41is situated immediately to the east of the two most recently announced offshore developments (based upon initial exploration discoveries during the 1980’s), the Basker oilfield which will utilise an innovative floating production, storage and offtake equipment (“FPSO”) and the Kipper gasfield which is now in the process of being developed. Within the permit area but excluded by a retention licence is the undeveloped Sole gasfield.

The offshore petroleum exploration permit Vic/P41 is located in the northeast of the offshore Gippsland Basin and covers an area of approximately 2165 km2 in water depths ranging from 60 metres in the north to 2000 metres in the south. Vic/P41 is currently held in a joint venture operated by Bass Strait Oil Company Limited (“BAS”) (45%), Moby Oil and Gas Ltd (“MOG”) (30%) and Eagle Bay Resources NL (“EBR”) (25%).

Following the two EBR and MOG farmins, the potential impact of the two conditional farmin agreements to joint venture participants and the Company in offshore Gippsland Permit Vic/P41 in Bass Strait are as follows:

• Bass Strait Oil Company Ltd (Operator) 45%
• Moby Oil & Gas Limited 30%, reducing to 25%
• Eagle Bay Resources NL 25%, reducing to 17.5%
• Oil Basins Limited: potential to increase from 0% to 12.5%.

Renewal of Permit Vic/P41

On 26 October, 2006 BAS announced that the Designated Authority has granted the Vic/P41 Joint Venture a new five year term. The renewed permit commenced 20 September, 2006 and, after relinquishment, is now comprised of 16 graticular blocks, including the 2005 Oscar 3D seismic survey area (refer to Figures below).

Structural Elements surrounding Vic/P41

Principal Vic/P41 Prospects (defined by 3D seismic) & Leads (defined by 2D seismic)

The Vic/P41 permit is presently in good standing and importantly no over-riding royalties apply in this Permit.

The work programme for the Vic/P41 second 5 year renewal are as follows:

Vic/P41 Work Program – 2^nd 5 Year Period

Prospectivity

The remaining non-relinquished Vic/P41 is now covered by an extensive modern 3D database (the 575 km2 Oscar 3D seismic survey shot in 2005) covering most of the permit.

The most important potential in the permit is considered to be the downthrown fault closures
interpretted along the Rosedale Fault. Emphasis is currently being given to plays adjacent to this fault by analogy with discoveries to the west e.g. Kipper. The leads Kipling, Benchley and Cotton, and several other smaller features, are identified as intra-Latrobe and Golden Beach plays. Downdip of the Hammerhead-1 well, a potential fault closure, remains untested at Golden Beach level (the Kipling Lead). In addition, a modern 2D seismic survey was acquired in 2003 by the Vic/P41 joint venture in the east of the permit that was located on leads east of the Sole field and along the Rosedale Fault trend to the southeast.

In the south of the permit area a number of structures have been mapped including the Oscar Prospect, Cotton Prospect and Benchley Prospect and the faulted anticline lead, Scorpion, has been mapped. The latter is positioned in relatively deep water and extends into permit Vic/P49 to the south.

Current Status

Interpretation of the 575 km2 Oscar 3D seismic survey is now underway with the aim of delineating prospective leads identified on older 2D seismic data.  Preliminary results are encouraging and the operator BAS is optimistic that the Oscar 3D survey will generate a number of prospects that may be suitable drilling targets. 

The Kipling feature is the highest-ranked Vic/P41 lead, it is on trend with and analogous to the Kipper oil and gas field where first production is planned for 2009. 

Similarly, the Vic/P41 Oscar lead is analogous to the on-trend Basker Manta oil and gas fields where the Basker-2 well recently achieved first oil production.    With the application of the Oscar 3D seismic data, it has been recently stated by BAS in their half yearly report dated 16 March 2006 (as the Operator) that the Vic/P41 joint venture now hopes to mature Oscar and Kipling, as well as other Vic/P41 leads, to drillable prospect status.  Any prospects matured would be ready for drilling in late 2007, subject to drilling rig availability.

Refer to BAS Farmout Presentation presented to PESA for comprehensive information.

JV Announcements

VIC/P41 Activities Update

Vic/P41 Farmout Presentation

Figures

More Information

For more information, please see the Operator's site: Bass Strait Oil Company Limited