Bridgeport Energy's 2024 Petroleum Reserves and Contingent Resources Statement
NHC (NHC) Share Update September 2024 Monday 16th
Bridgeport Energy Announces 2024 Petroleum Reserves and Contingent Resources Update
Bridgeport Energy Pty Limited, a subsidiary of New Hope Corporation Limited (ASX:NHC), has released its 2024 assessment of petroleum reserves and contingent resources. The report highlights significant changes in the company's reserves and resources, reflecting both positive developments and challenges in their operations.
Instant Summary:
- 2P reserves of 4.4 million barrels of oil equivalent.
- 2C resources of 4.9 million barrels of oil equivalent.
- Significant downgrade (~93%) of 2P gas reserves to 2C resources for Vali and Odin fields.
- Termination of CO2 EOR projects due to new environmental regulations.
- Continued profitability from high oil prices and successful crude oil production.
Reserves and Resources Overview
Bridgeport Energy's updated petroleum reserves and contingent resources statement as of 31 July 2024 reveals a mixed picture. The company reports 2P reserves of 4.4 million barrels of oil equivalent and 2C resources of 4.9 million barrels of oil equivalent. These figures are derived from nine petroleum projects in Queensland, with additional exploration tenements in Queensland, South Australia, and Victoria.
Bridgeport's operated crude oil production is sold to the IOR refinery in Eromanga, Queensland, while non-operated production from the Cuisinier and Naccowlah fields is sent to the Santos-operated Cooper Basin Joint Venture. All production is sold within Queensland, with oil sales priced at a premium to the dated Brent crude marker.
Challenges and Adjustments
Despite the overall positive outlook, the company faced significant challenges in its non-operated gas projects. The appraisal well drilling program at the Vali and Odin fields in southwest Queensland underperformed, resulting in a substantial (~93%) downgrade of 2P reserves to 2C resources. The operator, Vintage Energy, is undertaking workover activities to address these issues.
Additionally, the introduction of the MEROLA Act in June 2024 has impacted Bridgeport's environmental approvals. The Act prevents the injection of CO2 for enhanced oil recovery within the Great Artesian Basin, leading to the termination of CO2 EOR projects at the Moonie and Kenmore oil fields. Consequently, contingent resource volumes from these projects have been transferred to prospective resources.
Net Reserves and Resources Breakdown
The company's net reserves and contingent resources as of 31 July 2024 are as follows:
- 1P reserves: 1,048 Mboe
- 2P reserves: 4,391 Mboe
- 3P reserves: 7,601 Mboe
- 1C resources: 2,238 Mboe
- 2C resources: 4,869 Mboe
- 3C resources: 9,371 Mboe
Bridgeport Energy continues to utilize the Petroleum Resources Management System (2018 update) for reserves and resources determination, ensuring compliance with industry standards.
The downgrade of 2P reserves to 2C resources for the Vali and Odin fields is a significant setback, reflecting the commercial realities of these projects. This downgrade may negatively impact investor sentiment and the company's stock price. However, the continued profitability from high oil prices and successful crude oil production provides a positive counterbalance.
Investor Reaction:
Analysts are likely to have mixed reactions to the announcement. The downgrade of gas reserves is a concern, but the company's ability to maintain profitability through its oil projects may mitigate some of the negative sentiment. Investors will be closely watching the company's efforts to address the underperformance of the Vali and Odin fields.
Conclusion:
Investors should keep an eye on Bridgeport Energy's ongoing workover activities and their impact on future reserves and production. The company's strategic response to regulatory changes and operational challenges will be crucial in maintaining investor confidence. Staying informed about these developments will be key for making informed investment decisions.