Aberdeen based Plectrum Petroleum Plc is an AIM listed international oil and gas exploration company that focuses on deepwater exploration areas around the globe, which have remained either unexplored or under-explored due to historical limitations of conventional technology and the cost of drilling deepwater wells.

By utilising emerging technologies such as controlled source electro-magnetic (CSEM) imaging, Plectrum aims to build and develop a portfolio of exploration prospects with an overall improved risk profile.

In line with this strategy, Plectrum bid for two large frontier areas in the 2005 competitive bid round of the Australian government release of offshore exploration areas, and on 9 August 2006 the Commonwealth-Western Australia Joint Authority awarded Plectrum operatorship and 100% interest in permits WA-379-P and WA-380-P covering the Bremer Sub-basin offshore Western Australia. Plectrum’s other frontier exploration interests are in North Africa (Tunisia) and South America (Peru).

Western Australia Permits WA-379-P & WA-380-P The announcement of the awards by the Commonwealth-Western Australia Joint Authority for the two large Designated Frontier Areas (DFA) WA-379-P and WA-380-P (each of over 9,000 square kilometres) in August this year has, according to Plectrum’s Chief Operating Officer Mike Evans, “marked an exciting phase in the development of Plectrum Petroleum. Plectrum’s entry to the Australian exploration arena has been greatly aided by the enlightened policy of the Australian government and the considerable efforts of Geoscience Australia.”

Evans said the Australian government’s policy of making seismic and well data readily available has allowed companies to perform thorough independent technical evaluations of the areas offered in the 2005 bid round.

“This has helped Plectrum to identify the WA-379-P and WA-380-P frontier permits as areas well-suited to Plectrum’s policy of focusing on exciting under-explored areas where new technologies such as CSEM can add value.”

He said the increased uncertainty that accompanies frontier exploration has also been addressed by allowing DFA permits to qualify for a taxation deduction of 150% of exploration expenditure for petroleum resources rent tax (PRRT). Evans said this was a good example of incentive provision helping to attract companies to explore in such unexplored frontier regions.

In May 2003, the Australian government provided A$61 million to fund a four year programme aimed at developing new exploration opportunities in offshore Australia, through an integrated program of seismic acquisition, geological sampling and natural hydrocarbon seep detection in key frontier basins. In August 2006, the Australian Prime Minister provided a further A$76 million to expand the programme to allow a greatly increased amount of geoscientific data to be made available to explorers.

Plectrum’s Senior Geophysicist, Bob Nash, was impressed with the efforts of Geoscience Australia in this respect for the detailed and comprehensive studies it has performed over the Bremer Sub-basin. He said the Geoscience Australia studies had sown the seeds for Plectrum’s initial work programme over the two permit areas.

Nash said a Geoscience Australia report on the petroleum prospectivity of the permit areas (Record 2005/21 by Bradshaw et al) demonstrated the potential for the discovery of large hydrocarbon accumulations. The work has been based on the study of 1300 km of newly acquired seismic data in the sub-basin by Geoscience Australia as part of its regional Southwest Frontiers Survey (S280) – the first to cover the complete extent of the Bremer Sub-basin – in the fourth quarter of 2004.

“These data were tied to several hundred sub-surface geological samples (Geoscience Australia Marine Survey 265) previously collected from 45 sites by dredging sub-marine canyons that incise up to 2 km into the basin succession.”

Plectrum had a booth at the AAPG International Conference and they were visited by Industry, Tourism and Resources Minister, Ian Macfarlane. “We had the opportunity to congratulate him on the Australian government’s initiatives to attract exploration investment”, Nash said.

“The Bremer Sub-basin appears to be characterised by a series of small half graben offset from each other in a northeast en echelon fashion, creating a series of depocentres, with the possibility that they could have been separated from one another.”

Nash said a number of differing exploration plays have been identified:

“Numerous fault block traps with sediment cover up to 9.5 km in water depths of 1,000 – 2,500 m were formed during the Valanginian – Aptian. These have been estimated by Geoscience Australia as having the potential to contain P50 volumes of 250 MMbbl in place and an upside P10 estimate of 500 MMbbl of oil. Key seismic markers have been identified via ties to recovered dredge samples.”

He said there remains a great deal of uncertainty over the depth to basement in the central parts of the basin: the basement pick interpreted on the seismic example over WA-380-P could easily be interpreted much deeper (evidence of real primary reflections down to 7 seconds two way time), and a deeper basement pick would place additional Middle-Upper Jurassic source rock material into the oil generating hydrocarbon window.

Nash said the illustrated example seismic line over WA-379-P runs across one of the smaller depocentres towards the edge of the sub-basin. “The primary exploration play here is seen in large anticlinal structures beneath 4 - 5 km of sediment in water depths of up to 800 m. For these Geoscience Australia estimate the potential to trap P50 volumes of 500 MMbbl of oil in place with an upside P10 estimate of approximately 900 MMbbl of oil.”

“Additional prospectivity has been identified in numerous but smaller combined structural and stratigraphic traps present in most of the seismic units identified in the Bremer Sub-basin”, Nash said. “Potential traps occur either as up-dip stratigraphic pinch-outs associated with fluvial-lacustrine deltas, channel complexes, transgressive lacustrine sandstones and/or hanging wall fluvial fan complexes. The seismic data also show examples of amplitude anomalies that may be associated with trapped hydrocarbons.” “Further work on the risk reduction of such stratigraphic traps, and amplitude anomalies is clearly called for and Plectrum’s work programme for the two permits has been designed with this in mind.”

Nash said these examples indicate the hydrocarbon potential that exists in the Bremer Sub-basin and that further work is required to build upon that performed by Geoscience Australia. “To unlock this potential, Plectrum’s initial work programme includes the acquisition of over 3500 km of new 2D seismic data and Plectrum is currently embarking on a tendering process to secure a seismic vessel for 2007.”

“Acquisition, processing and interpretation of this data will help to locate the sites for further seabed gravity coring targeted at providing evidence of thermogenic hydrocarbons and source rocks. This will be followed by feasibility studies to determine whether controlled-source electromagnetic (CSEM) and marine magneto-telluric (MMT) remote sensing technologies can be successfully employed as risk reduction tools.”

As an environmentally responsible exploration company, Nash said Plectrum is acutely aware of the environmental issues associated with the acquisition of seismic data in the Bremer Sub-basin, in particular with respect to the migration of Southern Right whales between June and October.

“Subject to vessel availability, seismic data will be acquired between November and April in 2006-07 or 2007-08 and, as part of Plectrum’s environmental policy, it is planned to have a cetacean (marine mammal) observer on the vessel.”

A company representative is planned to attend the South Coast Regional Planning Advisory Group meeting to be held in January/February 2007. Also a meeting will be held with the local Fisheries Department office and fishing organisations soon after timing for the survey has been confirmed.

In addition to the recently announced awards in the Bremer Sub-basin, Plectrum also has ongoing operations offshore Tunisia and offshore Peru.

In Tunisia, Plectrum subsidiary REAP Tunisia GmbH is operator and has 50% interest in the Nabeul Permit. The permit is located in the Gulf of Hammamet in water depths of 250 – 1,200 m and lies adjacent to existing oil producing concessions. Entreprise Tunisienne d’Activités Pétrolières (“ETAP”), the Tunisian Oil and Gas Government Company, holds the remaining 50% interest.

“The Nabeul Permit is part of a larger exploration permit first licensed to Shell Tunirex 100% in 1973”, Nash said. “The eastern part of the permit, comprising the current Nabeul permit, was relinquished in 1978 and 1985 due to water depth constraints. Several wells were drilled in the retained area resulting in the discovery of the Tazerka, Oudna and Birsa oil fields, all located 5-10 kilometres from the western edge of the Nabeul block boundary. These structures are all fault bounded seabed highs with oil reservoired in Miocene aged Birsa Formation sandstones.”

He said Plectrum has identified four obvious Miocene Birsa Sandstone leads in the Nabeul Permit area with mean recoverable reserves totalling 320 MMbbl, all of which are fault blocks with surface expressions similar to discoveries made immediately to the west.

“However, the Nabeul Permit covers a large area of 3352 km2 and the existing seismic data coverage is very limited. In addition to further Birsa Sandstone prospectivity there are multiple additional play concepts to be evaluated, including deeper carbonate reservoirs (flowed condensate at Tazerka-1), a deeper high quality Cretaceous sandstone target (tested gas at Alfil-1A, 15 kilometres to the south) and potential for post-Miocene turbidite sandstones.” Nash said a 3000 km 2D seismic acquisition has been contracted to begin in May 2007 to better define the mapped leads and also to target the additional prospectivity identified in the permit area.

In Peru, Plectrum has formed a 50-50 joint venture with Gold Oil Plc in Block Z-34 offshore Peru, and in October 2006 Plectrum and Gold Oil initialled an Exploration & Exploitation contract for block Z34. Nash said the contract has been submitted to the Perupetro board for approval prior to submission to the Ministries of Energy and Mines, and Finance, for Supreme Decree.

“Block Z-34 is situated in the prolific Talara Basin which has produced to date in excess of 1.7 Bbbl of oil and 340 Bcf of gas”, Nash said. “The 3,713 km2 block lies in water depths of 100 – 3,000 m. There has been little exploration effort in Block Z-34 despite its location adjacent to existing producing concessions. There is limited seismic coverage (only 8 lines extend across the block) and no wells have been drilled in water depths exceeding 100 m (97% of Block Z-34 is in water depths greater than 150 m).”

He said an independent study of the Talara Basin offshore Peru (Higley 2004) suggests mean of 360 MMbbl of oil, 50 MMbbl of NGL and 1 Tcf gas within Block Z 34. “The initial proposed work programme is to acquire a conventional modern 2D seismic grid and enhance these data with CSEM.”

Evans said the next few years will be an exciting time for Plectrum as the company develops its existing assets and continues to search for other opportunities that fit its strategy. “The Bremer Sub-basin constitutes an important part of our current and future portfolio and we are looking forward to a successful period of exploration as we progress our work programme in this exciting new basin”, he said.