AN energy player backed by Warren Buffett’s investment company Berkshire Hathaway has become the latest to tackle the tight gas reserves at Whicher Range near Busselton, hoping to succeed where many others have failed since the area was first drilled in 1968.
Perth-based CalEnergy Resources, which is owned by US-based MidAmerican Energy, an entity controlled by Berkshire Hathaway, is funding the latest attempt to unlock the field’s potential in a deal that will earn it an undisclosed but significant stake in the venture.
CalEnergy Resources managing director Peter Youngs said the group was rebuilding its Australian portfolio after exiting from its main assets in south-east Australia last year.
Mr Youngs said that focus in Western Australia was currently on exploration and appraisal activity but the group’s owner, US-based MidAmerican Energy, was represented across the industry.
The most recent move in WA was to earn an interest in Whicher Range, a gas field south of Busselton, which has eluded commercial development for more than three decades due to its reservoir complexities.
Two exploration permits covering the most prospective part of the region are held by Whicher Range Energy, a private company which is understood to be controlled by oil and gas engineering consultancy AWT and its CEO Cameron Manifold, a former WA Business News 40under40 winner.
The Whicher Range gas field was first drilled by Union Oil in 1968. Since then, Mesa Australia, BP, Pennzoil and Amity Oil have made attempts to commercialise the field, often with much fanfare but ultimately without lasting success.
In June, drilling technology company Coretrack announced it had won a contract to conduct work for Whicher Range in an operation managed by AWT.
Drilling is expected to take place at Whicher Range before the middle of next year.
CalEnergy believes it brings new expertise to the field. The US gas market is dominated by supplies that come under the banner of unconventional gas, a group that includes tight gas, shale gas and coal-seam gas.
“We are approaching it in a different way to methods used historically,” Mr Youngs said.
“We have done a lot of detailed work and do not believe approaches made in the past were suited to the actual reservoir characteristics.
“We have significant experience of complex reservoirs that others find difficult. “That doesn’t mean the same answer applies to all reservoirs.”
Mr Youngs said that CalEnergy had also been involved in drilling in a joint venture with Key Petroleum in the Perth Basin.
“As an entity MidAmerican is on the lookout for quality assets in the energy sector in jurisdictions they feel they can operate well in. Australia is in that category.”
However, tax changes made Australia less attractive.
“You have to weigh up a jurisdiction against other jurisdictions,” Mr Youngs said.
