Warrego Energy, Dyas and Mazarine Energy to commence AUD 40 million appraisal of West Australian gas assets

Aberdeen-based Warrego agrees to farmout terms for West Erregulla field with two Dutch E&P specialists

Perth, Australia, 25 February 2014 - Warrego Energy today announced that it has signed an AUD 40 million farmout agreement with E&P businesses Dyas BV and Mazarine Energy BV for the appraisal and development of the West Erregulla tight gas field in Western Australia (WA). Located onshore within the Perth Basin, West Erregulla has been assessed to contain an estimated 185 bcf (billion cubic feet) of gas in place with a 3 tcf (trillion cubic feet) unconventional upside potential. Following the completion of the agreement and the receipt of all regulatory approvals, the equity split will provide Warrego with 20%, Dyas 30% and Mazarine Energy 50% of the equity. 3D seismic surveying will commence in 2014 followed by appraisal well drilling in 2015. Under the terms of the agreement Mazarine Energy will take over operatorship from Warrego following the completion of the appraisal program.

Duncan MacNiven, Warrego Director, commented: "We are delighted that Dyas and Mazarine Energy have partnered with Warrego and become part of the emerging onshore Western Australian gas story. We look forward to working with our Dutch partners in the appraisal and development of West Erregulla. I have no doubt that their technical and commercial capabilities will add value and assist us in maximising returns from this exciting project."

Dyas is a wholly-owned subsidiary of SHV Holdings N.V., a family-owned multinational in the Netherlands. SHV was founded in 1896 from a merger between a number of large coal trading companies. After the decline of coal as the primary source of energy, halfway through the twentieth century, SHV moved into other business areas. Today, the company is active in the trade and distribution of LPG, industrial services, cash-and-carry wholesale, private equity, heavy lifting and transport, and investment in upstream EP activities. SHV employs 56,000 people across 48 countries with a total turnover of 20 billion euro (2012). Dyas is an active investor, as non-operator, in oil and gas exploration, development and production joint ventures since 1964. Net UK and Netherlands developed reserves amount to some 67 million barrels of oil equivalent ("boe") and daily production equals 20 thousand boe."

Mazarine Energy is a subsurface-driven private oil and gas exploration and production company focused on early-stage exploration and field development. The company is currently active in North Africa, where it has a majority operating interest in an onshore license in central Tunisia. Mazarine Energy is owned and chaired by Dutch entrepreneur Edward Van Kersbergen. Edward founded the company after selling his share in upstream oil and gas consultancy Xodus Group. He took a majority stake in the company in 2011 and served as its Executive Chairman. Prior to joining Xodus, Edward founded and sold companies Horizon Energy Partners and Oyster Energy. Edward brings his own and his company's extensive technical and commercial competence. Edward commented: "Warrego has extensive operating experience and a comprehensive knowledge of the Western Australian domestic gas sector. Mazarine Energy has considerable expertise in all aspects of oil and gas field development. The combination of Mazarine and Warrego coupled with Dyas's technical expertise and commercial strength makes for an extremely strong team."

WA has one of the largest onshore gas potentials in the world. The Perth Basin alone has 200 tcf risked gas in place in both conventional and unconventional prospects (source: EIA). If key challenges can be met, a supportive local government and a ready customer base bode well for the long term development of this resource.

The WA commodities industry, the customer base, is vast and consumes massive amounts of energy. A mid-sized mine can use up to 6 million barrels of diesel a year, for instance. WA has hundreds of such mines operating and in varying stages of development. The switch to gas-to-power in the mines in response to commercial and environmental drivers will become increasingly compelling. Government estimates put the looming domestic gas shortage as high as 40% over the coming decades. Opening the onshore gas market can serve as a solution to that shortage.

Dennis Donald and Duncan MacNiven set up Warrego Energy five years ago, grasping the opportunity to become pioneers in driving the WA onshore gas market. By applying proven technologies and practices common in other parts of the world but new to WA, they intend to leverage their established position in the market. Warrego's aim was to acquire a strategic beachhead in WA. This was accomplished when they won the rights to block EP469 in the Perth Basin following a competitive tender in 2008. The block, which contains the West Erregulla field, is located close (20 kilometers) to the two pipelines that supply the potential WA customer base. With an estimated 185 bcf in place in the West Erregulla tight gas field and overlaying shale with 3 tcf potentially recoverable, Warrego remains confident of the future.

Warrego has been preparing the appraisal program for West Erregulla and gaining essential, environmental, safety and Traditional Owner permissions for the past four years. Following imminent approvals from the regulators Warrego will be in a position to shoot 3D seismic over the field early this year.

The appraisal program will proceed in two stages. A 3D seismic survey will be acquired and interpreted during the course of 2014. Assuming a successful survey outcome, the JV will proceed to drill an appraisal well on the West Erregulla structure in 2015. First gas is currently scheduled for 2016.

Dennis Donald, MD of Warrego, commented: "We are delighted that we have access to the technical and practical resources of Dyas and Mazarine Energy. Our immediate focus is to conduct the seismic and then complete our appraisal program on the West Erregulla early next year. We will then rapidly transition into full field development of the tight gas field. We see the farm-in as a demonstration of confidence in Warrego and the market by two respected and highly competent enterprises."

Warrego expects in the midterm that the JV may be well positioned to capitalise on the substantial shale resource within EP469, following recent successes in the shale by near neighbors AWE and Norwest.

Donald concluded: "With a proven and strong team, an excellent potential gas resource and a willing market, we are looking forward to building our common future in Western Australia."

For more information, please contact:

Warrego Energy
Louise Nicolson, Bread PR
+44 1224 615 855

Dyas BV
+31 30 2338 434

Mazarine Energy BV
Patricia Stuivenberg, Zeno Group
+31 20 301 0989 / +31 61 245 1345

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Warrego Energy to address the Unconventional Gas Forum 2012 in Barcelona

Today (13th March 2012), Dennis Donald, managing director, will address the Unconventional Gas Forum 2012 in Barcelona, about the phenomenal global potential of unconventional gas. As Warrego prepare to close second-round funding, Mr Donald believes the interest in the sector has never been greater.

Mr Donald said, "Industrialists, economists, analysts and politicians worldwide agree that with increasing energy consumption, comes the risk of a serious supply shortfall. Business models that served us well in an age of cheap and easy oil and gas, may struggle to be viable or competitive as the energy landscape rapidly changes.

"The 21st century world needs a transition fuel. In our view it is undoubtedly unconventional gas that will bridge the gap between growing energy demand and depleting conventional hydrocarbon resources. Unconventional gas should be seen as an enabler for the future renewable energy sources."

Global interest in unconventional gas has developed significantly over the last 12-18 months. In April 2011, this prediction was reinforced when the US Energy Information Administration (EIA) published an extensive report concerning the global outlook for shale gas mapping the 48 most important prospective basins in 32 countries. The Perth Basin, where Warrego’s unconventional gas block EP 469 is located, is one of four Australian basins identified by the EIA with major shale gas potential, extending to approximately 20,000 miles2.

Mr Donald continued, "The International Energy Agency has described the next 20 years as the potential 'golden age of gas', and I agree. From a standing start 30 years ago, shale gas now accounts for 34% of America's natural gas production and I believe this success can be emulated worldwide with ingenious definition technologies, rapid validation and importation of key enabling technology, all important factors in Warrego's success to-date.

"There is a clear opportunity for innovative companies to make their mark in this sector now. First-mover advantage is, in my opinion, key. We intend to import proven and successful key technologies from other oil and gas provinces and work with the best local experts and service providers to unlock the WA shale market.

"We are witness to the beginnings of a new era in the global energy mix and I look forward to meeting industry peers at the Unconventional Gas Forum."

Warrego Energy announce substantial shale gas resource and launch
Warrego Award 2011

Today (14th July 2011), Aberdeen-based Warrego Energy announce a potentially substantial shale gas resource within their licence block in Western Australia's North Perth Basin. The US Energy Information Administration (EIA) report, 'World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States', maps 48 prospective shale gas basins in 32 countries. This reveals a considerable prospective shale resource over the entire 224 km² of Licence EP469 which was won in a highly competitive tender by Warrego in 2008.

Dennis Donald, managing director of Warrego Energy said, "We are delighted the esteemed EIA has identified potentially substantial shale gas reserves in the North Perth Basin. We can confirm our block sits squarely within the area mapped by the EIA. The preliminary estimate for the Kockatea Shale may exceed 9 tcf (trillion cubic feet) in place over the Licence area. Assuming a 30% recovery factor, we estimate we can extract close to 3 tcf of gas with our proven expertise. In today's market, this adds billions of Australian dollars to the value of our block. Since establishing Warrego in 2007, we have been certain of the vast potential of the North Perth Basin. The EIA report has supplied independent recognition of this and more.

"We will continue to use local talent to help unlock these reserves. Today we launch our inaugural Warrego Award for SMEs working with innovative technology for business benefit. We want to encourage fellow SMEs to play a role in the global energy mix. A crucial factor in our success in the North Perth Basin has been the innovative application of technology in an economically and environmentally efficient way."

Mr Donald concludes, "Although we are oil and gas men, we want to hear from any small or medium sized business, from any industry, in any country. Entrepreneurship rarely respects geographical boundaries. We believe creativity and ingenuity actually increase between industries, between sectors, between countries. The Warrego Award provides a unique opportunity for collaboration and education across the barriers of 'business as usual'.

"And today's announcement is an unparalleled catalyst to local industry ingenuity."

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    Please contact Bread PR: Louise Nicolson on +44 (0) 7515 881474, or Leona Minellas
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