SYDNEY -- AWE Limited, as operator of the L1/L2 JV, has announced initial Contingent Resource estimates for the Waitsia discovery (formerly Senecio Deep) in the north Perth basin, Australia. The news follows the recently announced upgrade of the 2C Contingent Resources in Senecio field.

After initial analysis of data from the Senecio-3 well, and the existing 3D seismic, AWE estimates that the Kingia/High Cliff Sandstone intervals in Waitsia field have gross Contingent Resources in the range of 65 Bcf to 1,170 Bcf, with a best estimate (2C) of 290 Bcf.

The presence of a significant quantity of potentially moveable hydrocarbons is indicated by strong gas shows, petrophysical analysis and pressure data. Net to AWE, the combined Senecio and Waitsia fields represent a best estimate (2C) of 180 Bcf of gas.

Further evaluation and appraisal will be required to more accurately define the size of the accumulation and the lateral extent of the conventional and tight gas bearing sands. The Kingia/High Cliff Sandstone interval has not been previously penetrated in this part of the basin.

AWE is also evaluating the gas bearing intervals in the Irwin River Coal Measures and Caryniginia shale which could provide substantial additional unconventional resource potential.

AWE estimates that the Irwin River Coal Measures has gross Prospective Resources in the range of 114 Bcf to 1,497 Bcf, with a best estimate (P50) of 420 Bcf.

The presence of a significant quantity of hydrocarbons is indicated by strong gas shows and petrophysical analysis, but further evaluation and appraisal would be required to establish whether reservoir productivity will be sufficient for commercial development. At this stage, AWE currently estimates the chance of development at 20%. This risking will change with further appraisal activities. Prospective Resources for the Carynginia shale have not yet been estimated for this location, but could be substantial.

AWE has cased and suspended the Senecio-3 well in preparation for conventional flow testing of multiple reservoir intervals in the Senecio and Waitsia fields later in 2014.

A Waitsia appraisal well is also under consideration for drilling in early 2015 immediately following the drilling of the Irwin-1 exploration well in EP320 (8 km east of Senecio). The primary target for the Irwin prospect is the Dongara/Wagina sandstone, but the well will also evaluate the deeper prospective horizons that have been high-graded by the Senecio-3 result.

The conversion of Contingent Resources to Reserves is subject to successful flow testing and a final investment decision for field development.

Bruce Clement, AWE’s managing director, said, "AWE believes the Senecio/Waitsia discovery could represent the largest onshore conventional gas discovery in Western Australia since the Dongara gas field was discovered in the 1960s. Initial evaluation of the Senecio and Waitsia fields has identified 360 Bcf of gross Contingent Resources, which could be brought onto early production, utilizing existing gas plant and pipeline infrastructure just 7km from the Senecio-3 location.

"There is also substantial upside to this initial estimated gas volume that could be realized by successful appraisal of the Waitsia discovery and exploitation of the unconventional gas potential identified in the Carynginia Shale and the Irwin River Coal Measures. We are now focusing on flow testing of Senecio-3 to establish commercial viability and the potential early, low cost development of the Senecio and Waitsia fields."

The JV partners in L1/L2 are AWE Limited (operator, 50%) and Origin Energy Resources Limited (50.0%).