Latest / 360 with Katie Woolf / Empire Energy CEO Alex Underwood says the company is now planning to move into gas production in the Beetaloo after positive drilling results

Transcript

Empire Energy CEO Alex Underwood says the company is now planning to move into gas production in the Beetaloo after positive drilling results · 360 with Katie Woolf

• 0:00
  Speaker 1: Now. Earlier this week, the Northern Territory government released the
• 0:03
  Speaker 1: Strategic Regional Environmental and Baseline Assessment. It's known as the
• 0:08
  Speaker 1: SHRIBA for the Beaterloo sub Basin, which is one of
• 0:11
  Speaker 1: the key recommendations from the Scientific Inquiry into Fracturing in
• 0:16
  Speaker 1: the Northern Territory or fracking as we know it now.
• 0:18
  Speaker 1: The STREBER accounts for thirty five of the inquiri's recommendations
• 0:22
  Speaker 1: and aims to provide information well so that the appropriate
• 0:26
  Speaker 1: decisions can be made about the development of natural gas
• 0:29
  Speaker 1: extraction in the Beaterloo region, including the assessment of water
• 0:33
  Speaker 1: biodiversity resources to inform land use planning, and the collection
• 0:38
  Speaker 1: of baseline data to provide a reference for ongoing monitoring now.
• 0:42
  Speaker 1: The government says that the SHREBER puts more protections in
• 0:45
  Speaker 1: place for groundwater than ever before, not just in the
• 0:49
  Speaker 1: Beaterloo region, but right across the entire Northern Territory. So
• 0:54
  Speaker 1: where are things at when it comes to the be
• 0:56
  Speaker 1: Toloo Well, joining me in the studio right now is
• 1:00
  Speaker 1: High Energy CEO Alex Underwood. Good morning to you, Alex.
• 1:04
  Speaker 2: Good o Katie. Great to meet you and good to
• 1:06
  Speaker 2: be here in beautiful sunny Darlin.
• 1:08
  Speaker 1: Yeah, good to have you in the studio. Thank you
• 1:10
  Speaker 1: so much for your time now, Alex. Obviously the government
• 1:13
  Speaker 1: made this announcement earlier in the week. Does it provide
• 1:16
  Speaker 1: more or less certainty when it comes to the Beadlow?
• 1:19
  Speaker 2: In our opinion, this is a really key development in
• 1:22
  Speaker 2: terms of rounding off one hundred and thirty five recommendations
• 1:26
  Speaker 2: of the Pepper inquiry. You know, there's been a massive
• 1:29
  Speaker 2: piece of work done by government over the last five
• 1:32
  Speaker 2: years to implement all of those recommendations, and this gives
• 1:35
  Speaker 2: effect to thirty five of those recommendations.
• 1:39
  Speaker 1: You know.
• 1:39
  Speaker 2: The final step to move into production licenses would be
• 1:43
  Speaker 2: the final sign off of the government, and we understand
• 1:46
  Speaker 2: from comments by Minister Moss yesterday that that'll be potentially
• 1:50
  Speaker 2: happening in the next few weeks. In terms of the
• 1:52
  Speaker 2: impact of the Cerebra on industry, first of all, I
• 1:55
  Speaker 2: should say we haven't had a chance to read it yet.
• 1:57
  Speaker 2: It's hundreds of pages of work and it's only just
• 1:59
  Speaker 2: come through. I suspect there'll be a bit of weekend
• 2:02
  Speaker 2: reading for us. But what it really does that's quite
• 2:05
  Speaker 2: important for us is it gives us a very detailed
• 2:08
  Speaker 2: baseline against which we can now look to build our
• 2:12
  Speaker 2: facilities and minimize our environmental impacts as we do.
• 2:15
  Speaker 1: So there had sort of been some questions asked about
• 2:18
  Speaker 1: whether you know, whether it was going to become too
• 2:21
  Speaker 1: difficult to do business in the Northern Territory. How is
• 2:24
  Speaker 1: Empire feeling at this point.
• 2:27
  Speaker 2: Well, we're a small company, we're not a multinational, but
• 2:30
  Speaker 2: I think if you look at our track record over
• 2:32
  Speaker 2: the last few years, you know, I would say we've
• 2:35
  Speaker 2: disproven that. So we've been active in the in the
• 2:38
  Speaker 2: Northern Territory for over a decade now, working very closely
• 2:42
  Speaker 2: with TOOS throughout that period, but particularly in the early
• 2:45
  Speaker 2: years to get their full informed prior consent, and that
• 2:48
  Speaker 2: work continues. And over the last few years since I
• 2:51
  Speaker 2: joined the company in twenty eighteen, we've been one of
• 2:53
  Speaker 2: the most active companies in the basin. So we've carried
• 2:56
  Speaker 2: out seismic surveys, we've drilled four wells now the most
• 3:00
  Speaker 2: recent one was the longest horizontal well drilled in Australian history.
• 3:04
  Speaker 2: And also we've carried out three fracture stimulations across of
• 3:07
  Speaker 2: those four wells so far, and we've done so safely
• 3:10
  Speaker 2: and with some really encouraging results. So I think, you know,
• 3:13
  Speaker 2: we and others have proven that we can operate under
• 3:16
  Speaker 2: this regulatory framework.
• 3:17
  Speaker 1: Alex sir Asta, I know there'll be people listening this
• 3:19
  Speaker 1: morning who just really don't want fracking to go ahead
• 3:23
  Speaker 1: in the Northern Territory. But I guess the situation in
• 3:26
  Speaker 1: Australia right now or the argument is that while we
• 3:29
  Speaker 1: may all want to go to clean green energy, we've
• 3:32
  Speaker 1: actually got a transition to get there.
• 3:35
  Speaker 2: Absolutely. So first of all, I absolutely respect the views
• 3:39
  Speaker 2: of people who are concerned about fracking, and we have
• 3:42
  Speaker 2: a great burden of responsibility as a company and as
• 3:45
  Speaker 2: an industry to consult with, you know, not only the
• 3:48
  Speaker 2: directly affected stakeholders of our activities, but the broader community.
• 3:51
  Speaker 2: And you know we've been doing that for a number
• 3:53
  Speaker 2: of years and we will continue to going forward. But yeah,
• 3:58
  Speaker 2: certainly this transition towards net zero is going to be
• 4:02
  Speaker 2: a massive undertaking. And just yesterday a big report by
• 4:05
  Speaker 2: a group called net zero Australia, so some world renowned
• 4:08
  Speaker 2: universities came up with some numbers around what the transition
• 4:13
  Speaker 2: is going to look like for Australia, and we're talking
• 4:15
  Speaker 2: between seven and nine trillion dollars of investment between now
• 4:19
  Speaker 2: and twenty fifty, a trebling of the capacity of the
• 4:22
  Speaker 2: national electricity market. And even in that scenario, there's going
• 4:25
  Speaker 2: to be a require a doubling of gas fire generation
• 4:29
  Speaker 2: to provide peaking support. So gas will continue to play
• 4:32
  Speaker 2: a very important role in the energy mix going forward.
• 4:36
  Speaker 2: And also it's not just used for electricity, it's also
• 4:39
  Speaker 2: an important feedstock for everything we rely on in our
• 4:41
  Speaker 2: modern lives now.
• 4:42
  Speaker 1: Yesterday, Walsh reported that a Senate inquiry into fracking in
• 4:46
  Speaker 1: the be Toloo Basin is calling for further investigation into
• 4:48
  Speaker 1: the Middle Arm precinct, now, noting that obviously Empire Energy
• 4:52
  Speaker 1: isn't part of the Middle Arm development as I understand. However,
• 4:56
  Speaker 1: it Wash reported that a petrochemical plant would likely source
• 4:59
  Speaker 1: feedstock from the Beaterloo basin. So will there be any
• 5:03
  Speaker 1: impact to Empires plans with that potential inquiry or with
• 5:07
  Speaker 1: that inquiry?
• 5:08
  Speaker 2: Yeah, So we have a very close working knowledge of
• 5:11
  Speaker 2: that inquiry. It's been ongoing for a couple of years now,
• 5:13
  Speaker 2: and when the inquiry opened in twenty twenty one, we
• 5:17
  Speaker 2: made the proactive decision to actually actively participate in that inquiry.
• 5:21
  Speaker 2: We were the first of all of the gas companies
• 5:23
  Speaker 2: to make submissions to that inquiry and an appear before
• 5:26
  Speaker 2: the inquiry back in twenty twenty one, yep. And we
• 5:29
  Speaker 2: thought that was important because we think we have a
• 5:31
  Speaker 2: good story to tell around the work we've been doing
• 5:33
  Speaker 2: over the years and the approach we take to working
• 5:36
  Speaker 2: with communities and to protect the environment. You know, it
• 5:40
  Speaker 2: was fundamentally a pretty politically motivated inquiry set up by
• 5:43
  Speaker 2: the Greens Party, and you know, while while it doesn't
• 5:48
  Speaker 2: have any direct legal effect on government policy and therefore
• 5:51
  Speaker 2: we're not paying particular notice of it, one thing that
• 5:55
  Speaker 2: we did focus on during that inquiry was listening to
• 5:57
  Speaker 2: the submissions of lots of different colder groups and really
• 6:01
  Speaker 2: understanding what their concerns are. And you know what, you know,
• 6:04
  Speaker 2: and those who are in support.
• 6:05
  Speaker 1: As well, now talk us through you know what or
• 6:09
  Speaker 1: where are those exploration if it's at so far in
• 6:13
  Speaker 1: the Beaterloo basin.
• 6:14
  Speaker 2: Yeah, sure, So there's been a number of wells drilled
• 6:18
  Speaker 2: across the basin over the years in terms of our activities,
• 6:21
  Speaker 2: so we are on both the eastern and western sides
• 6:24
  Speaker 2: of the basin, so where most of our activity has
• 6:27
  Speaker 2: been so far is about one hundred k's west of Borolula,
• 6:31
  Speaker 2: but then also we own properties across the Sturt Plateau
• 6:35
  Speaker 2: on the other side of the basin. Over the last
• 6:38
  Speaker 2: few years, as I mentioned, we've drilled for wells and
• 6:40
  Speaker 2: that expiration activity has really been focused on assessing whether
• 6:45
  Speaker 2: or not we can economically extract gas from these resources.
• 6:48
  Speaker 2: The flow testing is ongoing and we've been very encouraged
• 6:52
  Speaker 2: by those results. And so now as a company, we're
• 6:54
  Speaker 2: moving into a phase of planning to move into production,
• 6:58
  Speaker 2: initially in a fairly modest utilizing existing pipelines, and they're
• 7:02
  Speaker 2: looking to build from there.
• 7:03
  Speaker 1: So do you think it's going to be economically viable
• 7:06
  Speaker 1: for you guys to be able to you know, to
• 7:08
  Speaker 1: do business in the be Toloo.
• 7:10
  Speaker 2: Yeah, so it is relatively early days, and that flow
• 7:13
  Speaker 2: testing is ongoing, but the results that we're seeing today
• 7:16
  Speaker 2: are very encouraging. We foresee, based on the results we're
• 7:20
  Speaker 2: getting that you know, the development costs of these activities
• 7:23
  Speaker 2: is likely to be two to three dollars a gigagel,
• 7:26
  Speaker 2: so so well below current prices, and so that gives
• 7:28
  Speaker 2: us a good degree of optimism that you know, we
• 7:31
  Speaker 2: can economically develop this asset.
• 7:33
  Speaker 1: So from your perspective, you know, depending on on I
• 7:36
  Speaker 1: guess you know, the different the different measures that the
• 7:39
  Speaker 1: Northern Territory government has in place, and even on a
• 7:42
  Speaker 1: federal scale, Empire is still prepared and is still keen
• 7:47
  Speaker 1: to fracken the be Toloo.
• 7:49
  Speaker 2: Absolutely.
• 7:50
  Speaker 1: Yeah.
• 7:50
  Speaker 2: So you know, we are bound by one of the
• 7:53
  Speaker 2: strictest regulatory regimes in the world, and you know, we
• 7:57
  Speaker 2: do really appreciate the significant amount of work that's gone
• 8:01
  Speaker 2: on across government here in the NT to implement those
• 8:04
  Speaker 2: Pepper recommendations. We keenly await the final outcome of the
• 8:10
  Speaker 2: sign off of the Pepper Inquiry in the coming weeks
• 8:14
  Speaker 2: and that'll really give us the confidence and our investors
• 8:17
  Speaker 2: the confidence to then move forward into the next phase.
• 8:19
  Speaker 1: Well, Alex Underwood, the CEO of Empire Energy, appreciate your
• 8:23
  Speaker 1: time this morning. Thank you very much for coming into
• 8:25
  Speaker 1: the studio and having a chat with us.
• 8:27
  Speaker 2: Thank you, Katie, really appreciate it.
• 8:28
  Speaker 1: No worries