MELBOURNE, June 6 (Reuters) – Western Gas said on Monday its Sasanof-1 exploration well off Western Australia found no hydrocarbons, in a big disappointment for one of the most closely watched drilling campaigns in Australia this year.
Ahead of drilling, the Sasanof prospect had been estimated by independent firm ERC Equipoise to hold a resource of 7.2 trillion cubic feet (tcf) of gas and 176 million barrels of condensate.
Energy consultants Wood Mackenzie and EnergyQuest had identified the Sasanof-1 well as one to watch this year. Privately owned Western Gas had called it "one of the most anticipated exploration wells on the North West Shelf in many years".
"Obviously this is a disappointing result," Western Gas Executive Director Will Barker said in a statement without disclosing any plans for further wells.
The Sasanof prospect combined with Western Gas's Equus gas field off Western Australia had been seen as a potential source to supply the North West Shelf LNG plant, Australia's oldest and largest liquefied natural gas plant.
The North West Shelf LNG plant is set to close one of five processing units in 2024 as its foundation fields are drying up.
Operator Woodside Energy Group Ltd's (WDS.AX) chief executive, Meg O'Neill, has said the joint venture is talking to a range of companies for gas supply.
Following the Sasanof disappointment and BP Plc's (BP.L) unsuccessful Ironbark exploration well in 2020, the North West Shelf partners would need to consider using more onshore gas, said EnergyQuest analyst Graeme Bethune.
"Unlike the offshore, the onshore seems to be doing well," Bethune said.
Western Gas's partners in the Sasanof-1 well are small oil and gas explorers Global Oil & Gas Ltd (GLV.AX), Clontarf Energy Plc (CLON.L) and Prominence Energy Ltd (PRM.AX).
Global Oil shares plunged as much as 81% and Prominence slumped 75% in Sydney after the drilling result was announced.
The exploration well cost between $20 million and $25 million, a Western Gas spokesperson said.
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Citi Research on Monday raised its quarterly oil price forecasts for this year and its year-average outlook for 2023, because additional supply from Iran looked heavily delayed, adding to tighter market balances.
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Closely watched exploration well off W. Australia finds no gas, oil – Reuters.com
