OilVoice - New Standard Expands Interest Over the Goldwyer Shale in the Canning Basin

New Standard Expands Interest Over the Goldwyer Shale in the Canning Basin

Tuesday, June 22, 2010

New Standard Energy Ltd has secured additional exploration to increase its shale gas exploration footprint over the Goldwyer shale in the Canning Basin, Western Australia to in excess of 48,000km2 or 11.9 million acres.

The additional Canning Basin acreage awarded to New Standard is prospective for shale gas and comprises two awarded application areas, 1/09-0 and 2/09-0. In addition, New Standard has been notified it is the preferred bidder for acreage release area L08-8. These areas lie adjacent to existing granted permits within the New Standard portfolio and form an integral part of the prospective Goldwyer shale exploration area in which New Standard has a 100% working interest.

In May 2010 New Standard received a report it had commissioned from specialist shale gas consultants, Netherland and Sewell and Associates (NSAI), to review the prospectivity of New Standard's Goldwyer shale exploration acreage. NSAI is a leading US-based oil and gas consultant, specialising in reserves and resources assessments, technical studies, economic evaluations, and advisory work for both onshore and offshore fields throughout the world.

NSAI concluded that the Goldwyer shale in the Canning Basin appeared to contain the requisite geological indicators for shale gas, providing New Standard with the confidence to increase it acreage holding and accelerate its shale gas exploration program. On the back of the NSAI report New Standard also engaged Euroz Securities to assist assess alternatives to progress the Goldwyer project.

In addition to its Canning Basin exploration permits, New Standard announced on June 3, 2010, that it had secured an acreage holding in excess of 8,500 km2 (2.10 million acres) in the onshore Carnarvon Basin, Western Australia . That project, called the Merlinleigh Project, is highly prospective for both unconventional and conventional gas and is located next to the Dampier to Bunbury Natural Gas Pipeline.

Existing Goldwyer Shale Permit Revisions
In order to efficiently progress the exploration of the Goldwyer shale, the Western Australian Department of Minerals and Petroleum (DMP) and New Standard have agreed to amendments to some of New Standard's existing Goldwyer shale focused permits, EP's 450, 451 and 456. A partial relinquishment has been agreed along with substantial revisions to the work commitments and work programs over these acreage areas, specifically:
- Replacement of the requirement to acquire 600 line km of 2D seismic with the acquisition of 6,000 line km of aerial gravity gradiometry across EPs 450, 451 and 456
- Approval of the suspension and extension requests for permit year 2 for each permit such that permit year 2 now ends on 31 December 2010

The proposed aerial gravity gradiometry acquisition can be acquired more quickly and far more cost effectively than traditional seismic data acquisition and should facilitate the selection of exploration drilling targets well ahead of what the original work commitments envisaged. Assuming the requisite approvals can be achieved, this will hopefully result in drilling on these permits being conducted 2-3 years earlier than would otherwise have been possible whilst also saving New Standard approximately A$8m-A$10m in exploration costs.

New Standard Energy Managing Director Sam Willis said New Standard's expanded Canning Basin acreage footprint was located within the prospective window of the Goldwyer shale play and combined with the agreed work program revisions will provide a strong foundation for shale gas exploration.

'New Standard's Australian exploration focus is now firmly on progressing exploration of shales over the remainder of the 2010 and 2011 calendar years. Importantly, the addition of the new Canning Basin acreage means New Standard has just increased its footprint over the most prospective gas window of the Goldwyer acreage' Mr Willis said.

'Whilst the process to restructure the work commitments associated with our existing permits has taken a while to work through, we are delighted with the outcome and thankful to the DMP for their assistance. The new work commitments will facilitate a more comprehensive and faster shale gas exploration push and we estimate will save us around $8m - $10m in the process.'