By Martin Clark
TSX-listed Bengal Energy has some production assets on its books in Australia’s Cooper Basin, a known hydrocarbon province, plus some high potential exploration projects onshore India.
That’s always a good balance: some oil flow to keep the bills paid, and the prospect of a lot more of it to come. And it’s even better when new discoveries are announced.
Earlier this month, the Canadian-based company reported a new gas find with the Nubba-1 well in the Wompi sub-block, in Permit ATP752P onshore Australia. The well encountered light oil shows in five different reservoir formations. It also intersected up to 20 feet of gas pay, with reservoir pressure data indicating a potential gas column of up to 230 feet.
It said the find “adds another focus area within a well-established producing fairway which has demonstrated multi-zone production potential.”
Bengal’s core Australian assets, Cuisinier and Tookoonooka, are still in the early stages in terms of appraisal and development, but the company believes them to offer attractive upside potential. Certainly, the production trend is on the up.
Net production in the second quarter averaged 457 barrels of oil equivalent per day (boepd), nearly all of it light oil, an increase of 27 per cent from 361 boepd in the previous quarter.
In the second quarter results, dated November 13, Bengal’s president and chief executive Chayan Chakrabarty put the year’s production growth down to the potential of the company’s asset base. He said it follows “the largest drilling campaign in Bengal’s history.”
The success of the Nubba-1 well will no doubt provide plenty of encouragement going forward. It’s a good platform then to start venturing further afield too.
What’s really intriguing right now is that Bengal is ready to sink its teeth into some of its Indian projects, with three explorations wells lined up in the Cauvery Basin for next year.
Bengal is working with some big partners, Gas Authority of India Limited (GAIL) and Gujarat State Petroleum Corporation, to obtain final approvals and coordinate the drilling.
This programme is anticipated to launch at the end of the first quarter 2015.
All in all, it may be a good one to watch in 2015, with Chakrabarty promising another active year ahead. “We have a number of exciting operational milestones ahead of us in the coming months,” he commented.
There’s financial flexibility too following the recent completion of a credit facility, and, with drilling on two fronts ahead, that’s more than enough to keep investors engaged.
Of course, what ultimately matters is what the drill bit shows up, but this junior tiger clearly has an appetite on it.