Emperor Energy Ltd (ASX:EMP) continues to make progress in the development of the Judith Gas Project 40 kilometres offshore from Orbost Gas Plant in the Gippsland Basin of Victoria.
The company is preparing to engage well management consultants AGR to commence the application process to secure necessary approvals from relevant government authorities to drill the Judith-2 Well.
Notably, Emperor Energy is in the process of in-depth discussions and negotiations with potential exploration partners to fund the Judith-2 appraisal well.
Looking ahead, the company is focused on achieving first gas sales from Judith Gas Field in 2027.
Judith Gas Project objectives
EMP’s objective is to establish a sales gas capacity of 80 terajoules(TJ) per day equivalent to 28 petajoules(PJ) per year over a minimum production period of 15 years.
The project requires drilling of a successful Judith-2 appraisal well in early 2023 to prove gas reserves and subsequently provide economic justification for gas field and processing plant development leading to targeted commercial production of sales gas in 2027.
A project pre-feasibility study completed by gas pipeline company APA during 2020 provides a clear understanding of the infrastructure path and cost required to achieve commercial production.
Securing exploration partner
Fundamental to the development of the project is securing an exploration partner to fund the appraisal well.
The recently acquired 3D seismic data across the Judith Gas Field has reduced exploration risk and has re-rated the Judith-2 Well from exploration to appraisal well status in the Judith Gas Sands previously penetrated by the Judith-1 Well.
Emperor Energy has now received the final and fully reprocessed version of the new seismic data. This is being incorporated into the project marketing process and is attracting additional interest as discussions with potential farm-In partners continue.
Drilling preparations
AGR carried out initial well design studies for Emperor Energy in 2020 and has now scoped out the approval process in detail, expected to commence in early 2022 and be completed by year-end.
Following peer review from exploration experts with significant Gippsland Basin experience, Emperor Energy is now of the opinion that the Judith-2 Well is the best advanced and most prepared gas target in the offshore Gippsland Basin complete with a clearly defined infrastructure route to the lucrative Australian East Coast Gas Market.
Critical energy source
The Australian Government on November 26, 2021, confirmed the ongoing importance of gas in the Australian economy via the release of the 2021 National Gas Infrastructure Plan.
Gas remains a critical energy source in the energy mix to ensure the reliability of the electricity grid as the use of intermittent renewable energy sources expands.
Australian Energy Market Operator (AEMO) forecasts an early decline in production from southern gas fields (Longford Gas Plant).
AEMO also predicts East Coast gas supply shortfall to occur unless LNG imports commence in 2023.
In addition, the market operator also forecasts Victorian gas pricing at $10 per gigajoule(GJ) (in 2020 A$ terms) by 2028.
Projected production rates see annual revenue from the Judith Gas Field exceeding $A300 million at $10/GJ pricing.
EMP shares have been as much as 17% higher to 4.2 cents intraday.