Beach Energy has started its preparations to drill a conventional onshore gas exploration well in the Penola Trough, Otway Basin located in South Australia.
The company will receive funding from the South Australian Government through the Plan for Accelerating Exploration (PACE) gas grant scheme.
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According to the PACE grant, the company can enter bilateral negotiations with prospective South Australian customers for a supply of gas from Haselgrove-3 at prevailing market terms, provided the discovery is deemed fit for commercial activity.
The government grant is subject to the agreement of formal documentation.
Beach CEO Matt Kay said: “We are pleased to once again be exploring for gas in the onshore Otway Basin in South Australia.
“The region is well known to Beach and we are confident that in a success case, it can supply new gas to the market.
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By GlobalData“We also acknowledge the support provided by the South Australian Government through its PACE gas grant scheme.
“Haselgrove-3 is a conventional gas well that will not be fracture stimulated. Beach will undertake extensive community and stakeholder consultation throughout the planning, drilling and post completion phases of this drilling activity.”
The onshore Otway Basin is a proven gas province with existing infrastructure and pipeline networks located close to it.
Beach Energy has operated in the region for more than 50 years.
In 2014, Beach conducted an exploration drilling at the site, which identified prospectivity in the Sawpit Sandstone Member situated beside previously productive reservoirs.
Haselgrove-3 will be drilled in PPL 62 located near to the Katnook gas processing facility, pipeline network and the SEA Gas transmission system.
The well will be targeting conventional gas and gas liquids in the Sawpit Sandstone Member.
The company estimates that the $6m PACE grant will cover nearly 40% to 50% of the estimated cost to drill Haselgrove-3.
