Lakes Oil signed the agreement with the Research Institute of Petroleum Exploration and Development-Northwest (NWGI) of China following a visit to Australia by a number of NWGI executives.
Lakes Oil Chairman Robert Annells said in a statement that NWGI had recognized that the onshore section of southeastern Australia's Gippsland Basin had extensive untapped potential for oil and tight gas.
Annells added that the development of Lakes Oil's Wombat tight gas field had triggered worldwide interest, given its proximity to the prolific Bass Strait offshore oil and gas fields, operated by ExxonMobil and BHP Billiton.
The Bass Strait's Gippsland Basin was Australia's first offshore oil and gas province and has produced more than 4 billion barrels of oil and 7 Tcf of gas since 1969.
In addition, "news that Beach [Energy] had joined us to help develop the Wombat wells to a possible commercial level and to spend up to A$50 million [$49.5 million] did not go unnoticed in the oil and gas industry in China," Annells said. Lakes Oil signed an agreement in August under which Beach Energy would earn up to 50% of its Wombat and Trifon fields in a two-stage farm in.
"For Lakes, it is a major breakthrough to attract companies like Beach and PetroChina's research and development arm," Annells added.
Under the terms of the agreement, NWGI will research Lakes Oil's petroleum tight gas geosciences technology, match it with similar work already being done in China and provide advanced seismic reprocessing. The partners will use Lakes Oil's data to conduct detailed evaluation of possible
reservoirs and liquids to provide a basis for commercialization.
Lakes Oil recently commissioned Gaffney, Cline & Associates to update estimates of Wombat's gas resources, based on drilling results from the Wombat 4 well. The contingent recoverable gas resource is now put at 329 Bcf, with the P50 estimate of gas initially in place now 787 Bcf, up from 700 Bcf estimated in 2008.
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