(BRK.A), (BRK.B)
In mid-November 2015, Berkshire Hathaway Energy’s Australian subsidiary, CalEnergy Resources, drilled a test well in Western Australia for what could be what the company is calling modestly a “significant gas field.”
How Significant?
Four trillion cubic feet of gas-in-place significant.
Exploration permit EP 408 is located approximately 280 kilometers south of Perth, and covers both the Whicher Range and Wonnerup gas fields.
The gas fields were first discovered in 1968 and 1971, respectively, and are located in ancient sandstone reservoirs nearly four kilometers underground.
The fields contain an estimated four trillion cubic feet gas-in-place, and Berkshire’s share currently stands at approximately 84%. Other partners include Which Range Energy.
Peter Youngs, the Managing Director of CalEnergy Resources Group, recently discussed with MazorsEdge the progress on the development of the gas field, noting that “the field represents a large in place gas resource, its characteristics are challenging and there is much work still remaining to move this resource to a commercially developable status.”
As for the test well, Youngs said “we are encouraged by the flow rates, as seen during the test, but that the critical commercial assessment (of the flow rates) is subject to a period of substantial subsurface data integration work (which is ongoing).
“We are in the process of recovering down hole pressure gauges from an offset well, whose data will be an integral part of that subsurface data integration. We expect this work to continue over the coming months.”
As to when the gas field could start to produce meaningful amounts of natural gas, it still looks to be over a year away.
“We are working on the potential next steps in field commercialization.” Young says, “but it is unlikely that we will return to operational activity prior to end 2017 at the earliest.”
To read more about this natural gas field, read the MazorsEdge Special Report: Is Berkshire Hathaway About to Strike it Rich in Natural Gas?
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.