C OOPER ER/ O M AN GA BA S I N SOU T H AU ST R …petroleum.statedevelopment.sa.gov.au/__data/assets/pdf...0 3-Dec-2013 Prepared Final S. McCartney, Manager Compliance 1 3-Dec-2013

OPS-CT-RPT-0011 PEL513 Annual Report Permit Year 1 (11 October 2012 – 10 October 2013)

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P E L 513

C O O P E R / E R O M A N G A B A S I N

S O U T H A U S T R A L I A

A NN U A L RE P O RT

PER M IT Y EAR 1

11 O C T O B E R 2 0 1 2 T O 10 O C T O B E R 2 0 1 3


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Quality Information

Document Title: PEL513 Permit Year 1 Annual Report

Reference: OPS-CT-RPT-0011

Prepared by: Suzanne McCartney, Manager Compliance

Reviewed and

Approved by:

Andrew Coffey, Project Manager Wet Gas

Revision History

Revision Date Details Status Name Signature

0 3-Dec-2013 Prepared Final S. McCartney, Manager Compliance

1 3-Dec-2013 Internal Review and Issued for Use

Final A. Coffey Project Manager Wet Gas


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CO NT EN T S

1 I NTRODUCTI ON ............................................................................................................................. 4

2 PERMI T SU MMA R Y ....................................................................................................................... 6

3 REGU LAT ED A C TI VI TI ES ............................................................................................................ 7

3.1 DRILLING A ND REL ATED ACTIVITIES .............................................................................. 7

3.2 SEISMIC DATA ACQUISITION ............................................................................................ 7

3.3 SEISMIC DATA PROCESSING AND REPROCESSING .................................................. 8

3.4 GEOCHEMICAL, G RAVITY, MAG NETIC AND OTHE R SURVEYS ............................... 9

3.5 PRODUCTION AND PROCESSING ..................................................................................... 9

3.6 PIPELINE CONSTRUCTION AND OPE RATION ............................................................... 9

3.7 PRELIMINA RY SURVEY ACTIVITIES ................................................................................. 9

4 COMP LI AN CE I SSUES ................................................................................................................. 9

4.1 LICENCE NON-CO MPLIANCE ............................................................................................. 9

4.2 REGULATORY NO N-COMPLIANCE .................................................................................. 10

4.3 MANAGEMENT SYSTEM AUDITS .................................................................................... 10

4.3.1 DRILLING ......................................................................................................................... 10

4.3.2 SEISMIC ............................................................................................................................ 10

4.4 REPORT AND DATA SUBMISSIONS ............................................................................... 13

4.5 INCIDENTS............................................................................................................................. 11

4.6 THREAT PREVENTION ....................................................................................................... 12

4.7 FUTURE WORK PROGRAM ............................................................................................... 12

5 EX PENDI T UR E STA TEME N T ........................................................................................................ 12


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1 I NTRODUCTI ON Petroleum Exploration Licence 513 (“PEL 513 ” or “the Licence”) was granted to Drillsearch (513) Pty Limited (“Drillsearch”) on 11 October 2012.

The Licence area is located in the Cooper Basin, South Australia and is situated on the western margin of the Patchawarra Trough, one of the major depocentres in the South Australian portion of the Cooper Basin.

This report details the work conducted during Licence Year 1 of the Licence from 11 October 2012 to 10 October 2013 inclusive (the “Reporting Period”), in accordance with Regulation 33 of the Petroleum and Geothermal Energy Regulations 2000 (the “Regulations”) under the Petroleum and Geothermal Energy Act 2000 (the “Act”).

PEL 513 covers an area of approximately 1494km2 and is shown in Figure 1. Associated Activities Licences (AAL) AAL191 and AAL192 were granted 1 March 2013 and 23 May 2013, respectively. AAL191 and AAL192 were granted as an adjunct to PEL513. The granting of the Associated Activities Licences permitted the carrying out of the 2013 Munathiri Infill 3D Seismic Survey. This report also pertains to the operations conducted during the licence year of PEL513 in accordance with Regulation 33 of the Petroleum and Geothermal Energy Regulations 2013. AAL191 and AAL192 were granted for a period of 12 months, with expiry dates of 28 February 2014 and 22 May 2014, respectively. PEL513 is due to expire on 10 October 2017.


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FIGURE 1 - PEL 513 MAP


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2 PERMI T SU MMA R Y At the commencement of licence Year 1, licensees for the Petroleum Exploration Licence (PEL513), were: Drillsearch (513) Pty Limited - 100%

On 10 September, Drillsearch Limited and Santos Limited formalised an agreement resulting in Santos farming into PEL 513 and earning 60% interest in the block. The current work commitments associated with PEL513 are set out in Table 1.

TABLE 1 – CURRENT W ORK COMMITMENTS BY LICENCE YEAR

Licence Year Licence dates Minimum Work Program

Year 1 11/10/2012 – 10/10/2013 1000km seismic reprocessing

Year 2 11/10/2013 – 10/10/2014 200km2 3D seismic acquisition 500km seismic reprocessing Drill 3 wells.

Year 3 11/10/2014 – 10/10/2015 100km2 3D seismic acquisition; and 3 wells.

Year 4 11/10/2015 – 10/10/2016 300km2 3D seismic acquisition; and Drill 5 wells.

Year 5 11/10/2016 – 10/10/2017 Drill 6 wells.


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3 REGU LAT ED A C TI VI TI ES Pursuant to Regulation 33(3)(a) under the Act .

3.1 DRILLING A ND REL ATED ACTIVITIES

No regulated activities undertaken in the Reporting Period.

3.2 SEISMIC DATA ACQUISITION

Greater Leleptian 3D Seismic Survey Drillsearch participated by acquiring seismic data on the completion of the Santos operated Greater Leleptian 3D seismic survey covering approximately 400 km2 that covered significant portions of PEL 513.


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Munathiri 3D Seismic Survey AAL191 and AAL192 were granted on 1 March 2013 and 23 May 2013, respectively for the purpose of carrying out the 2013 Munathiri Infill 3D seismic Survey.

Inspection of the Munathiri 3D Seismic grid was conducted during the Cooper Basin Work Area Clearances which were conducted by Jan Scott and Tim Cuthbertson during 18 – 27 March 2013, on behalf of the Dieri Aboriginal Corporation.

The Munathiri 3D Seismic Survey consisted of 320.4km2 of seismic data acquisition conducted by WesternGeco, which commenced on 30 March 2013 and was completed on 22 April, 2013.

FIGURE 2 - MUNATHIRI 3D SEISMIC SURVEY

3.3 SEISMIC DATA PROCESSING AND REPROCESSING Seismic data processing and interpretation of Munathiri 3D Seismic Survey 320.4km2 is currently in progress by Western Geco and the final reports will be submitted to DMITRE, pursuant to Regulation 36 of the Petroleum and Geothermal Energy Regulations 2013.


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3.4 GEOCHEMICAL, G RAVITY, MAG NETIC AND OTHE R SURVEYS No regulated activities undertaken in the Reporting Period.

3.5 PRODUCTION AND PROCESSING


3.6 PIPELINE CONSTRUCTION AND OPE RATION


3.7 PRELIMINA RY SURVEY ACTIVITIES


4 COMP LI AN CE I SSUES Licence and Regulatory Compliance

Pursuant to Regulations 33(3) (b) & (c)

Detailed information on the individual instances of non-compliance is provided below in designated sections.

4.1 LICENCE NON-CO MPLIANCE

During the licence year, 1000 km of 2D seismic reprocessing was not completed and was not officially substituted by the additional 3D seismic acquisition. However, the licensee was involved in the acquisition of approximately 720 km2 of new 3D seismic data.


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4.2 REGULATORY NO N-COMPLIANCE

TABLE 2 – REGULATORY NON-COMPLIANCE

No. Date Activity Details of Non-Compliance Rectification of Non-Compliance

1 09/05/13 Submission of Quarterly Cased Hole Report 1Q 2013.

Late submission, due 30/04/13 submitted 09/05/13.

Quarterly cased hole reporting is now integrated into one quarterly cased hole report for all SA permits.

2 13/05/13 Submission of Operations Quarterly Compliance Report 1Q 2013.

Late submission of Operations Quarterly Compliance Report due to clarification report submission was required if no incidents to report.

Compliance register updated to capture Operations Quarterly Compliance Reports required including quarters with nil incidents.

4.3 MANAGEMENT SYSTEM AUDITS

Pursuant to Regulation 33(3) (d)

No full Management System Audits were carried out during the year. Management System components (eg. checklists, guides etc) were amended and updated during continuous internal reviews and use, which is part of the overall Management System Audit Process. Environmental audits were conducted by RPS Aquaterra Pty Ltd in relation to the 2012 Munathiri 3D Seismic Survey, per section 4.3.2 of this report.

4.3.1 DRILLING


4.3.2 SEISMIC Seismic operations were conducted in accordance with the Drillsearch Environmental Management Plan. The Environmental Management Plan (EMP) developed for the survey was derived from the requirements of the “Cooper Basin Geophysical Operations Statement of Environmental Objectives – June 2006". Consequently, there were no significant non-compliances with the EMP detected during the Reporting Period. During the reporting period, RPS Aquaterra Pty Ltd was commissioned to conduct a post-survey field audit of the seismic survey area. The field audit carried out 26-27 June 2013 included:

Environmental monitoring points: Environmental monitoring points selected by Drillsearch at

the commencement of the survey were visited and a complete set of ‘after’ photographs were taken along the seismic lines at each point. ‘Before’ and ‘after’ photographs provided by Drillsearch were checked, and photograph information corrected if necessary (e.g. direction, timing). Markers (wooden stakes) were installed at each point. Where the GPS location for the


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points were clearly incorrect (e.g. the ‘before’ photos were taken from a different point or at a different line intersection) revised GPS coordinates were collected. A complete set of descriptions, locations and photographs for the environmental monitoring points is provided in Appendix 1.

GAS scoring adjacent to environmental monitoring points: Source and receiver lines were inspected for approximately 300 m in each direction from each environmental monitoring point, and Goal Attainment Scaling (GAS) scores were allotted in accordance with the criteria established in the Statement of Environmental Objectives (SEO) for geophysical operations in the Cooper Basin (Santos 2006). Where seismic lines crossed different land units (e.g. dune, floodplain) GAS scores were allotted for each land unit.

Targeted GAS scoring: A range of additional sites and landforms throughout the survey area were targeted for inspection, including waterholes and road crossings. Observations were recorded and GAS scores allotted to determine the level of SEO compliance.

Opportunistic observations and GAS scoring: Observations were made throughout the survey area where relevant (e.g. where issues are noted) and GAS scores were allotted where relevant, including general observations on SEO compliance and Environmental Management Plan compliance. Areas of focus included compliance with SEO criteria that were not covered by GAS criteria such as dune-cutting adjacent to tourist tracks and weed issues.

A checklist of SEO requirements was completed for the survey area to identify any areas of potential non-compliance. Following the field inspection, a report “Munathiri 3D Seismic Environmental Report” was prepared and distributed, internally and to DMITRE.


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As a result of the environmental and rehabilitation review, the following recommendations were summarised:

TABLE 3 – RECOMMENDATIONS

Issue Recommendation

4.1.1 Multiple tracks For future surveys the risks of multiple tracks should be considered in the planning phase. Where there are significant risks to weeds, vegetation, fragile soils or cultural heritage, or where traffic levels may be higher, instructions should be given to survey personnel to avoid or minimise the use of multiple tracks.

4.1.1 Line width Survey lines and access tracks should be kept to the minimum width.

4.1.1 Multiple tracks / SEO

Consider the specific inclusion of the techniques used in this survey within the next revision of the SEO, to ensure that they are clearly covered and compliant.

4.1.5 Disguising lines at established tracks

Ensure that seismic lines are doglegged and vegetation is used to disguise the line at intersections with established roads and tracks.

4.1.6 Camp - litter It is suggested that a final cleanup of the camp site be carried out at an appropriate time to remove all remaining litter.

4.2 EMP If similar survey methods are used in the future, the EMP should specifically capture the survey methodology in detail to ensure that occurrence of multiple track use is more clearly spelt out and the compliance parameters around it identified.

4.2 Environmental monitoring point setup

More detail on establishing and using environmental monitoring points (e.g. a datasheet with instructions) should be included in the EMP to increase the consistency between photographs and the efficiency of follow-up visits.

4.2 Environmental monitoring point specification

The number of environmental monitoring points required should be specified in survey planning, preferably in the EMP. For most seismic surveys, 3 to 4 environmental monitoring points should be adequate.


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4.4 REPORT AND DATA SUBMISSIONS

Pursuant to Regulation 33(3) (e)

TABLE 4 - COMPLIANCE AND REPORTING

No. Document / Report Description DateDue Date Submitted

Compliant(Yes/No)

Well Proposal Documents:

N/A

Drilling Reports:

N/A

Open-Hole Wireline Logs:

N/A

Cased-Hole Wireline Logs:

N/A

Well Completion Reports:

N/A

Quarterly Reports

1 Quarterly Cased Hole Report 4Q 2012 31/01/13 N/A N/A

2 Quarterly Cased Hole Report 1Q 2013 30/04/13 09/05/13 No(1)

3 Quarterly Cased Hole Report 2Q 2013 31/07/13 29/07/13 Yes

5 Operations Quarterly Compliance Report 4Q 2012 31/01/13 NA NA

6 Operations Quarterly Compliance Report 1Q 2013 30/04/13 13/05/13 No

7 Operations Quarterly Compliance Report 2Q 2013 31/07/13 29/07/13 Yes

Well Down-hole Diagrams:

N/A

Production Data Reports:

N/A

Other Engineering Reports:

N/A

Seismic Reports:

1 Munathiri 3D Seismic Survey Activity Notification 21/02/13 18/01/13 Yes

2 Munathiri 3D Seismic Survey Processing Progress Report

21/05/13 21/05/13 Yes

3 Munathiri 3D Seismic Survey Processing Progress Report

11/06/13 11/06/13 Yes

Other Reports/Documents:

1 Work Area Clearance Final Report (Dieri) 22/05/13 22/05/13 Yes

2 Notice of Intended Entry Munathiri 3D Seismic Survey 07/03/13 21/01/13 Yes

3 Munathiri 3D Seismic Environmental Audit and Environmental Monitoring Report

04/11/13 04/11/13 Yes

NOTES: (1) DMITRE approved extension of submission date. (2) Late submission


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4.5 INCIDENTS

Pursuant to Regulation 33(2) (f)

TABLE 5 - LIST OF REPORTABLE INCIDENTS FOR THE REPORTING PERIOD

Field Date Quantity / Area Affected

Incident Description Root Cause Steps taken for cleanup and rehabilitation

Steps taken for prevention of recurrence

PEL513 Nil incidents to report.


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4.6 THREAT PREVENTION Pursuant to Regulation 33(2) (g)

No threats have been identified to the proposed exploration activities for PEL 513 for the reporting period.

4.7 FUTURE WORK PROGRAM Pursuant to Regulation 33(2) (h) under the Act

5 EX PENDI T UR E STA TEME N T Pursuant to Regulation 33(3) under the Act

Confidential (attached under separate cover).

Licence Year Licence dates Minimum Work Program Actual (Planned) Work Program

Year 1 11/10/2012 – 10/10/2013 1000km seismic reprocessing Munathiri 3D seismic acquisition: 320.4km2; and processing

Greater Leleptian (GL) 3D seismic acquisition: 400 km2; and processing

Year 2 11/10/2013 – 10/10/2014 200km2 3D seismic acquisition500km seismic reprocessing Drill 3 wells.

Complete processing of Munathiri 3D seismic survey and interpretation

Interpret the GL 3D seismic survey

G&G studies including seismic interpretation and prospectivity review

Drill three new exploration wells