Warro Gas Project

The Warro Gas Project is an exciting undertaking for industry stakeholders, the local Warro community and the joint venture partners. The field has 7-10 trillion cubic feet (Tcf) in place and potentially 1-3 TcF of recoverable gas.

The field is situated in a convenient location onshore in the Perth Basin, approximately 200 kilometres north of Perth.

It is less than 35 kilometres east of both the Dampier-Bunbury Natural Gas Pipeline and the Dongara-Perth Parmelia Pipeline.

The Warro Gas Field (contained within Retention Leases 6 and 7) was discovered in 1977 by WAPET when the Warro-1 well intersected with a substantial gas saturated column. Further drilling confirmed a 390 metre gas column in what is called the “Yarragadee Formation”.

Whitebark became involved in the project in November 2007 when it agreed to provide $3.6 million in seed capital as a loan to Latent Petroleum, which held full ownership of the Warro Gas Project and was progressing it as its sole focus. The loan agreement offered Whitebark the right to earn a 10% interest in the promising Warro Gas Field.

Less than a year later Alcoa of Australia entered into a farm-in agreement with Latent Petroleum, at which time Whitebark elected to exercise its right to convert the $3.6 million loan into a 10% interest.

Under the farm-in agreement signed in 2008, Alcoa may earn a 65% interest through funding a staged farm-in evaluation program, which includes a five-well drilling program, seismic surveys and production facilities for initial production.

On 23 March 2011, Whitebark announced the acquisition of Latent Petroleum, which increased its interest in the Warro Gas Project to 35% after the completion of the farm-in by Alcoa of Australia. Latent Petroleum remains operator and is continuing to evaluate the Warro Gas Project on behalf of the joint venture partners.

In 2009 and 2011, Latent Petroleum drilled two wells (Warro-3 and Warro-4) and acquired a 3D seismic survey over the field. Gas was safely produced from both wells.

A group of independent experts based in the USA completed a detailed analysis of the available data (including 3D seismic data) on the Warro Gas Field in 2012. The analysis confirmed significant quantities of gas are held within the field with the potential to flow at high rates.

As a result of these conclusions the Warro Joint Venture decided in late 2014 to continue its evaluation of the field by the drilling of Warro 5 and 6 during the second half of 2015.

Originally falling within Exploration Permits 321 and 407, the Warro Field area location was granted to Latent by the DMP in September 2008.

In December 2014, the Warro Joint Venture successfully applied for the locations over the field to be converted to Retention Leases 6 and 7. Additionally, the remainder of EP407 was relinquished in full along with four graticular blocks in EP321, developments required by statutory regulations.

The Warro Joint Venture also successfully negotiated a Native Title Agreement with the Yued people during 2014. This agreement allows for field operations through development and production to take place.

In 2015, Latent Petroleum, as operator of the Warro Gas Project, is conducting a third phase of work. This includes drilling two wells more than four kilometres into the earth to fracture stimulate rocks and encourage the gas contained within the reservoirs to flow to the surface.

The work fully complies with the Environmental Protection Authority’s (EPA) guidelines on hydraulic fracturing released in December 2014. The work has also undergone a stringent review by the WA Department of Mines and Petroleum with input from the Departments of Water; Agriculture; and Parks & Wildlife.

The process for extracting gas and bringing it to the surface (detailed below) has been scrutinised by the EPA, which has determined it will not have a significant environmental impact. In making this assessment, the EPA considered many environmental factors including the activity’s impact on water, air and human health.

The extraction process used by Latent Petroleum is a thoroughly tested approach that eliminates any chance of gas or other fluids escaping and contaminating water aquifers or the air. The gas will be extracted far below (more than 3,500 metres below) any existing water bores that tap water from about 100 metres below the surface. The wells are designed to the highest environmental and safety standards, checked to ensure they are safe during construction and continuously monitored throughout their life.

In its most basic form, the extraction process will involve pumping water deep into a well at high pressure. It forces tiny, localised cracks or “fractures” into the rocks which are held open with sand grains or proppant. This means the permeability of the rocks is greatly increased, allowing the gas held in the tight rocks to flow to surface. All producing wells are carefully designed to provide long term, safe and reliable flow of gas.

The well bores are lined with three protective layers of steel and cement to bring the gas to surface safely and are monitored continuously to ensure well integrity is maintained.

Latent Petroleum will publicly disclose and monitor the small amount of chemicals used during the extraction process. In line with regulations, all the chemicals will be isolated at the surface and any aquifer units will be protected by at least two pressure barriers. At the end of the Warro Gas Project, Latent Petroleum will return the environment to its natural state with no trace of work activities – an obligation also dictated by industry regulation.