Transerv Energy (TSV)

Shares / Stock Code

TSV

Stock Exchange / Sharemarket

ax

Transerv Energy (TSV) is an ASX listed energy company which focuses on oil and gas project investment opportunities. The company has recently acquired a 10% interest in the onshore Warro Gas Project located 200km north of Perth. TSV was listed on the Australian stock market (ASX) on 10 March 2004. Its head office is situated in Brighton le Sands, New South Wales. TSV was renamed to its current name in December 2008.

TSV's recent acquisition of the Warro Gas project has the potential to add 10% to the current gas supply to the South West of Western Australia from a large new gas source located just to the north of Perth. TSV competes with similar energy companies that also invest in oil and gas exploration opportunities.

Transerv holds 10% interest in the Warro Project. Warro Project is located 200 kilometres north of Perth in Western Australia. The Company operates in Australia and the United States. The Company holds 100% interest in Tejon Energy Inc.

Warro Projects

The Warro Gas Field is contained within EP 407 and EP 321 onshore in the Perth Basin. The field is located approximately 200 km north of Perth and 31 km east of both the Dampier-Bunbury Natural Gas Pipeline (DBNGP) and the Dongara-Perth Parmelia Pipeline (PP). The Warro Field was discovered in 1977 by WAPET when Warro-1 intersected a substantial gas saturated column. The follow up appraisal well, Warro-2 confirmed a 390 metre gas column in the Yarragadee Formation.

The Warro structure is a large compressional anticline with 17,000 acres of four way dip closure, defined by a grid of 2D seismic. Volumetric estimates by previous operators indicate a total Gas Initially In Place (GIIP) of up to 7.5 Tcf contained in the Warro structure.

Development of the Warro Field did not occur in the 1970s because the discovery was a tight gas field and uneconomic at the prevailing low gas prices (approximately $0.20 per Mcf). Additionally, hydraulic fracture technology at the time was not sufficiently advanced to successfully stimulate a reservoir at this depth due to the high pressure and temperature encountered.

Testing in 1977 of two zones on Warro-2, after fracture stimulation with water based fluids, flowed 80 Mcf/d and 104 Mcf/d respectively. Since the 1990s there has been a step-change in fracture stimulation and completion technology for tight gas fields.

In 2007, Latent commissioned Schlumberger’s USA based fracture stimulation team to evaluate all available data to amongst other things, determine the likely range of production outcomes from development wells. Schlumberger reported that vertical wells into the Warro Field are expected to yield in excess of 6 Bcf each with an initial rate >6.5 MMcf/d while horizontal wells may produce upwards of 20 Bcf with an initial rate of >25 MMcf/d.

Schlumberger has reported that the Jonah Field, a tight gas field in southwest Wyoming, is an excellent analogue for Warro. The Jonah Field was discovered in the 1970s but because fracture stimulation treatments were unsuccessful at that time, wells that tested positively for gas were plugged and abandoned. In the mid 1990s a gas discovery well was re-entered and stimulated effectively. Today the Jonah Field is one of the most prolific gas fields in North America. It currently produces 680 MMcf/d from 2,400 wells with a total estimated ultimate recovery of 14 Tcf.

Schlumberger noted that Warro reservoir characteristics are more favourable than those of Jonah in a number of important areas: the thicknesses of the Warro pay intervals are greater, more laterally continuous and have higher permeability than in Jonah. The lateral continuity of these sands suggests that wells in the Warro Field will drain larger areas, making the Warro Field a candidate for horizontal drilling. This would reduce the number of wells required to develop the Field and enhance its economics.