Australia Pacific LNG – CSG Production

Presented by Ross Evans

Group Manager, Exploration Appraisal & Development, QLD CSG

Qld Petroleum Exploration Association

11 February 2014

Origin is responsible for the upstream program for Australia

Pacific LNG, leveraging over 16 years of CSG production

experience …

2 |

Australia Pacific LNG tenure in the Surat and Bowen basins at 30 June 2012

… with Australia Pacific LNG having a dominant position in Queensland's premium CSG acreage

• Australia Pacific LNG is the only

company that has prime

acreage in both of the

Queensland CSG “sweet spots”

• Australia Pacific LNG Phase 1

targets those sweet spots for

initial development and ramp

up to first LNG

• Australia Pacific LNG has both

diversity and scale of resources

to better manage risks

associated with CSG

0

5,000

10,000

15,000

20,000

25,000

Reserves ContingentResources

EstimatedProject

Requirements

PJe

3P = 16,155

2P = 13,382

2C = 3,644

Ramp & tail Gas

T2 ~ 5,000

T1 ~ 5,000

Australia Pacific LNG’s reserves base continues to expand, with 3P

reserves of 16,155 PJe and an additional 3,644 PJe of 2C

contingent resources

3 |

while 2P reserves are more than sufficient to cover gas requirements for

all domestic contracts, as well as off-takes from both trains

• Large CSG reserves position

• Well developed resource base

Domestic Gas

~ 1,000 ORG Contract

~ 1,000

Australia Pacific LNG Reserves

and Resources

(1) Represents ramp and tail gas for two trains, volume will vary depending on operation strategy

QGC GSA

~ 640

1

Australia Pacific LNG permit

Conventional & CSG

Denison Trough fields

Permian CSG fields

Walloon CSG fields

Walloon Fairway

Permeability & net coal Sweet spot

Permian permeability Sweet spot

Permian Fairways

Regional Geology

Regional Seismic Section

4 |

5

Basement

Base mid Triassic

Base Jurassic

Key features • Major structural elements

• Major unconformities

• Coal measures sequences

Western Platform Moonie High

Bandanna/Tinowon/Baralaba

Reids Dome

Springbok

Present Day

Talinga

Hutton

Seis

mic

tra

vel

tim

e

Combabula Condabri

Undulla Nose Taroom Trough Balonne Nose

Walloon

Moolayember

Regional Geology

5 |

Tipton

6

Basement

Key features • Major structural elements

• Major unconformities

• Coal measures sequences

Base mid Triassic

Taroom Trough

Present Day

Fairview Spring Gully

Scotia Peat

Moonie High Western Platform Balonne Nose

Bandanna/Tinowon/Baralaba

To the north …

Surface

Deeper erosion of section

Reids Dome

Undulla Nose Seis

mic

tra

vel

tim

e

6 |

Spring Gully Coal Continuity

Spring Gully coal seams are continuous

over many 10’s or possibly 100’s of

kilometres

Walloons coal seams are thinner and the

packages which contain the seams vary in

thickness across the area

Walloon Coal Variability

Regional Geology - Depositional history creates key differences

7 |

The sweet spots demonstrate world-class reservoir

properties

What makes a good CSG producer

1. High net effective coal thickness

2. Laterally extensive coals

3. High gas content saturation

4. High permeability

5. Shallow depth (low cost to drill)

6. Low CO2 content

Source: Journal of Petroleum Technology & Australia Pacific

LNG data

8 |

TJ/day

2.5

2.0

1.5

0.5

1.0

Australia Pacific LNG has secured more prime CSG acreage...

• Successful Gazettal bid,

May 2013 grant date.

• Bolt-on acreage adjacent

to existing Condabri

(PL265, 266, 267)

development areas.

• 76km2 prime Undulla

nose acreage

• High likelihood of

reserves booking after

initial exploration

drilling.

...enabling high-value step-out development

9 |

Exploration and Appraisal is progressing as planned

Green – pilot wells online

Blue – E&A wells drilled

Operating pilots across Australia Pacific LNG

acreage in the Surat Basin and Northern Denison

Trough

Increase in Australia

Pacific LNG operated E&A

well execution since late

2012

10 |

Horizontal Wells

Pad Drilling

Drilled at Spring Gully and on production

Drilling in 1Q2014

Production Enhancement

• 38 production enhancement trials conducted to date,

more planned for 2014

A number of technology trials are underway to deliver

Phase 2 improvements

11 |

Production History

12 |

Denison, Peat and Moura

Since 1990s

Spring Gully

Ph 1 & 2

Spring Gully

Ph 3 & 4

Spring Gully

Ph 5 & 6

Talinga

Ph 1

0

50

100

150

200

250

300

350

400

Talinga Spring Gully Kenya Fairview Denison Trough Peat Moura

TJ/Day

13 |

Maximum well deliverability considerably higher than current

production levels indicate …

(1) Excludes domestic gas sales and pre LNG-start up gas sales to BG.

(2) Average rate reflects inclusion of approximately 30 Talinga wells recently started that currently average 0.7 TJ/day and are still ramping up.

(3) Maximum average observable rate sustained over a week, looking back over one year, from wells that have been online for more than 6 months.

• The operated wells to be drilled for Phase 1 are expected to produce around

1,200 TJ/d1, with an additional 200 TJ/d1 from non-operated assets

• Current operated well production is around 1 TJ per well per day on average across

the Talinga and Spring Gully developments, however the observed maximum average

well deliverability2 across these areas is considerably higher

• Well production is turned down to meet market demand but operationally cycled to

maintain confidence in deliverability

Averages over Quarter

to 30 September 2013

Average well

production

Maximum average

well deliverability,3

Talinga 1.4 TJ/day2 2.2 TJ/d2

Spring Gully 0.8 TJ/day 1.2 TJ/d

… whilst Phase 1 planning assumes 1.1 TJ/d per well on average

15% of Talinga wells

have maximum

deliverability over

4 TJ/d

Well Production, Deliverability & Turn-down

• Typical phase 1 well forecast

to have:

– peak gas rate 1-2 TJ/d

– peak water rate 500-1000

bbl/d

– approx 50-70% of well’s

reserves produced within

first 5 years

• Field deliverability to be

monitored during ramp

phase

• Excess deliverability to be

turned down to balance

supply & demand

Pro

ducti

on R

ate

Gas

Dewatering

Stage

Water

Stable Production

Stage Decline Stage

Time

Time

Gas

Volu

me

14 |

4 33 68

119

191 219

244 267

2 36

80 98

117

195

0

50

100

150

200

250

300

End 2011 End Q1 2012

End Q2 2012

End Q3 2012

End Q4 2012

End Q1 2013

End Q2 2013

End Q3 2013

Wells Drilled

Wells Completed

15 |

Condabri drilling has been progressing well

• 267 Condabri wells drilled to

date

• 195 Condabri wells completed

to date

• 14 Condabri wells

commissioned and producing

to date

• Net coal thickness results

exceed pre-drill expectations

0

5

10

15

20

25

30

Predicted Observed

Ne

t coal

thic

kn

ess

(m

)

Early Condabri water rates encouraging...

16 |

...with performance comparable to Talinga

Chart shows water

production rate observed

during the completion

operation

This provides an indication

of ultimate well

performance

Talinga wells produce over a

range with the best wells

peaking at over 4TJ/d

Condabri completion results

indicate similar performance

to Talinga

More Productive

0

500

1000

1500

2000

2500

3000

3500

4000

4500

-50 50 150 250 350

Wate

r ra

te (

bbl/

d)

test

ed b

y

com

ple

tion r

ig

Flow test results

Talinga wells Condabri wells Less Productive

17 |

General Project Update

Eastern Gas Fields (Condabri/Talinga)

September 2013

Western Gas Fields (Spring Gully/Combabula)

September 2013

Upstream development implementation – Phase 1 well

progress

Miles

Condamine

Chinchilla

18 |

Combabula

Spring Gully

Upstream development implementation - Pipeline

• Pipeline design features: 360 km 42-inch main trunk line

and 160 km lateral pipelines to gas fields with 50 year

design life

• 84% complete at the end of September 2013

• Land access, clearing and stringing for mainline complete

• Nacap has constructed Wooleebee Lateral as sub

contractor while MCJV constructs the main pipeline

• The Condabri lateral is complete including hydrotest,

enabling gas transport to the domestic market

• Narrows Crossing construction nearing completion

• GLNG and Australia Pacific LNG pipeline collaboration

announced on 25 October, avoiding need to build 140

kilometres of additional pipeline

Installation of main pipeline Narrows Crossing 19 |

1. Two trains of 4.5 MTPA capacity, consisting of:

1. 6 General Electric (GE) Model LM 2500+ G4

Dry Low Emission drivers

2. Turbine inlet air chilling

3. Redesigned nitrogen reinjection units

4. Waste heat recovery

• EIS approval for four trains

2. Utilities required:

1. Power generation

2. Water and sewerage (from the mainland)

3. Air and nitrogen

4. Ground flares

3. Control Room capable of operating four trains

4. Maintenance, administrative, and warehouse

facilities for two trains which can be expanded

5. Two LNG storage tanks

1. Capacity of 160,000 m3 each

• LNG loading berth and jetty

– Suitable for ships with capacity up to 220,000 m3

• Temporary facilities set-up for construction include:

– 2,600 man camp

– Offices

– Laydown area

Curtis Island site overview

Australia Pacific LNG Downstream Facilities

20 |

Liquefaction of natural gas is an established technology, with project design based on the

Darwin LNG project which has operated since 2006

Downstream Project progress – 54%1 complete and on track

LNG Tank B – roof raised on 29 July Batam Module Yard – Propane Condensate

Module Curtis Island

Downstream Operated Goals FY2014

Plan Actual Progress to 30 September 2013

Final Train 1 refrigeration compressor set Q1 Accomplished

Accommodation camp complete Q1 Accomplished

Complete Train 2 compressor table tops Q2 Accomplished

Complete loading platform for LNG jetty Q2 On Track

First Train 1 cold boxes (methane and

ethylene) delivered to site and set Q2

On Track: Cold Boxes complete, due to be shipped 1st week of

November

Last Train 1 Module set Q3 On Track: All Train 1 Modules are due to be shipped early 2014

(1) As at 30 September 2013. 21 |

Thank you