Canning Basin Overview
- 1. Overview of the Canning Basin
- 2. Prospectivity of Tenements
- 3. Exploration History
- 4. Why is the Basin under-explored?
- 5. Exploration risks in the Canning Basin exploration program
1. Overview of the Canning Basin
a) General overview
The onshore Canning Basin lies in the Kimberley region of central northern Western Australia some 2,300 kilometres north of Perth. Two population centres, Broome and Derby, have shipping and air facilities, and Broome also serves as the shipping terminal for refined petroleum for the region and was previously used for the export of oil produced from the Blina and associated fields. Minor oil pipeline grids service the Blina and associated oilfields, and the Telfer gas pipeline runs along the southern margin of the basin. All weather access roads run along the northern edge of the Basin. The heavy rainfall associated with cyclones during the period from December to March can isolate sections of the road network and restrict access.
The Canning Basin is the largest sedimentary basin in Western Australia covering an area of some 530,000 square kilometres. It is one of the few remaining areas in onshore Australia which is under explored for petroleum and it has geological similarities with highly productive Palaeozoic Basins worldwide. The exploration economics of the Canning Basin have been enhanced by sustained high oil prices and increased demand and prices for domestic gas in Western Australia.
b) Geological overview
The Canning Super-Basin has four major basins contained in it, each with its own geology and prospectivity. In a strict geological sense there is overlap between the basins but in a commercial and exploration sense each basin has its own story and exploration history.
- The Fitzroy/Gregory Basin – up to 15 kilometers of section, holds the currently commercial fields and is the most explored
- The Kidson Basin has thinner section (4 to 5 kms) and has thick salt seals. It has very little exploration, and unquantified potential
- The Broome Platform has a thinner section but many good oil shows and oil and gas flows
- The Willara Basin has had little exploration and is of lower prospectivity
The following map illustrates these geological areas.
2. Prospectivity of Tenements
The prospectivity of the Super-Basin can be further delieated by various sub-areas. These are set out below with refernce to the permits held by Buru.
Fitzroy Trough - Northern margin
The EP104/R1, EP129, L6/L8 (Blina) production licences, together with EP371, lie along the northern margin of the Fitzroy trough. These licences contain the only commercial oil production in the Canning Basin at the Blina/Sundown and associated fields which have produced a total of approximately 1.8 million barrels of oil. The extensive infrastructure in the Blina area means any discoveries in this area will be able to be quickly and economically brought on stream. The Company has recently completed the Bunda 3D seismic survey over the Sundown and associated field areas and exploration wells are being drilled in this area during 2010.
Exploration targets in this area include the Famennian aged carbonate reef buildups which host the Blina Field and in which the Stokes Bay 1 well encountered cavernous porosity. Gas has also been tested from this section in the Point Torment 1 well. The other principal exploration target in this area is the Carboniferous Laurel/Anderson section in a basinal setting as encountered in Valhalla 1. The Paradise prospect is a large anticline in this play type and will be drilled in the 2010 exploration program.
Fitzroy Trough – Southern margin
This area principally includes the EP391, EP428, EP436 permits and a number of permit application areas. The principal play type in these areas is gas in the Laurel Formation. This play concept was tested by the Yulleroo 2 well which further defined the large Yulleroo gas accumulation discovered by the Yulleroo 1 well. There are numerous other prospects and leads in this area which are candidates for drilling in 2011. Their proximity to Broome and transport infrastructure is an advantage for development if commercial hydrocarbons are encountered.
Broome Platform and Willara Sub-basin
Permits EP 431, EP 390, EP 438 and EP 448 and a number of permit application areas lie in this region. The principal play types in these permits are the Nita Carbonates and the Acacia sandstones with Ordovician aged source rocks. Previous drilling on the Pictor structure has confirmed the presence of producible gas and light oil from this system. The play type is believed to extend over a wide area. Mapping of the Pictor structure has delineated a location, Pictor East 1, that is a candidate for the 2010 drilling program. Horizontal drilling is being considered to potentially enhance oil and gas flow rates.
Kidson Sub-basin
The Kidson Sub-basin covers a very large area in the southern part of the Canning Basin. The Kidson Sub-basin is very lightly explored but has significant oil potential with a hydrocarbon system that includes high quality source rocks and an extensive sub salt seal. There is a widespread potential sandstone reservoir unit, the Acacia Sandstone, which has contained residual oil in a number of wells. The Buru exploration effort is focused on what is considered to be the most prospective part of this exploration area with conventional reserves potential.
3. Exploration History
Petroleum exploration activity began in the Canning Basin in the early 1920s and nearly 250 wells have since been drilled onshore. There has also been the acquisition of approximately 78,000 kilometres of seismic data onshore.
Although many of the regional exploration wells had shown the presence of oil and gas, the Canning Basin remains substantially under-explored with few valid structural tests. The drilling density of the Canning Basin is nearly one tenth that of the onshore Perth Basin.
Until the mid-1980s exploration largely focused on the northern and central basin areas in the Fitzroy Trough which has been considered to be the most prospective area of the Canning Basin. This is due to its substantial sedimentary thickness, reefal carbonate buildups along the half-graben hingeline in the north, and structural development in the southwest.
Other prospective areas of the Canning Basin include the Broome Platform and the Kidson Sub-basin. The sub-salt Looma discovery was the first proof of mature migrated oil from a source kitchen in the southern Canning Basin, thereby identifying a potential new exploration play.
4. Why is the Basin under-explored?
The Basin has effectively been “embargoed” for 20 years for the following reasons:
- The oil price crashed in the early 80’s followed by the stock market crash in 1987.
- Funding for exploration in the basin dried up with low oil prices, poor equity markets and difficult native title negotiations (the perfect storm).
- Just prior to the stockmarket crash in 1987 there was the first commercial oil discovery at Blina (currently owned by Buru), followed with a number of additional small oil discoveries.
- Gas has been widely encountered in the Basin but never systematically tested or followed up.
- The current oil price and Buru’s Alcoa gas contract allows commercialisation of even small oil and gas volumes.
- Modern data and analysis allows for the first time a systematic, targeted exploration effort.
- Native tile is now resolved and systematic approval processes are in place.
5. Exploration risks in the Canning Basin exploration program
The principal causes of failure of previous exploration wells have been:
- Structural integrity of prospects – because of the frontier nature of the area many wells have been drilled on poorly seismically imaged structures. The size of the area, the many prospects and the relatively high cost of seismic data means that Buru may be unable to acquire sufficient new seismic data over all prospects to ensure the drilling program has the best chance of success. This risk will be mitigated by focused exploration on areas of known high prospectivity.
- Structural timing – The Canning Basin has been subject to a number of severe structural episodes which have led to faulting and inversion of structural traps. This can increase the risk of trap integrity through geological time, and the timing of structures in relation to the timing of oil and gas migration. The risk will be mitigated by careful structural mapping and concentration on basin margin areas where structuring has been less intense.
- Reservoir quality – There have been numerous intersections of hydrocarbon bearing reservoirs in the basin but they are generally tight or low permeability with low flow rates. Preservation of reservoir quality is generally more problematic in older rocks such as are present in the Canning Basin due to their more complex diagenetic history, however, despite this, there still have been numerous intersections in the basin of good to excellent quality reservoir rocks. Detailed technical analysis is required to ensure the best chance of intersecting hydrocarbon reservoirs where porosity and permeability has also been preserved.
The other principal risk for the Buru exploration program is to ensure wells are drilled in a cost effective manner. This will require a focus on “fit for purpose” drilling rigs and commercially aligned contractors.
The objectives and overall strategy of Buru aims to ensure these risks are recognised and mitigated to the extent possible.