OPERATIONAL REVIEW - ENERGY
MINRES CONTINUES TO PURSUE OPPORTUNITIES FOR NATURAL GAS AND RENEWABLES TO SUPPORT SUSTAINABLE ENERGY SOLUTIONS FOR OUR BUSINESS. The MinRes Energy business plays a critical role in locking in a low-cost, long-life energy supply for remote operations while supporting the company’s Roadmap to Net Zero. The company’s growing Energy team is focused on exploring new and existing opportunities for conventional natural gas and renewables to provide efficient and cost-effective energy and reduce the company’s dependency on diesel, while also capitalising on downstream opportunities that deliver enduring shareholder value. In Q4 FY23, MinRes Managing Director Chris Ellison confirmed the appointment of Darren Hardy as Chief Executive Energy. Mr Hardy will lead the company’s energy transition strategy that includes successful completion of the current onshore Perth Basin drilling campaign and developing significant onshore natural gas discoveries into production. As the largest petroleum acreage holder in the onshore Perth Basin and onshore Carnarvon Basin, MinRes works closely with landowners, governments, and industry and community stakeholders to ensure energy opportunities are explored responsibly and safely. Displacing diesel with gas for power generation, combined with significant investments in renewable energy, reinforces the company’s efforts to reduce operational (Scope 1 and Scope 2) carbon emissions and achieve net zero emissions by 2050. The company has set a medium-term target to reduce emissions by 50 per cent by 2035 for existing operations. This medium-term target is based on FY22 operational emissions (Scope 1 and Scope 2) and includes all existing operations, including the Pilbara Hub (Wonmunna and Iron Valley), Yilgarn Hub (Koolyanobbing, Parker Range and Carina) and Mt Marion. The baseline will be adjusted when structural changes occur in the company that change the facility boundary, such as acquisitions or divestments.
48 I MINERAL RESOURCES LIMITED 2023 ANNUAL REPORT
PERTH BASIN EXPLORATION MinRes’ extensive onshore acreage position across the Perth and Carnarvon basins is complemented by a portfolio of development opportunities, including the significant conventional gas discoveries at Lockyer Deep and North Erregulla, near Mingenew in the Mid West region of Western Australia, in 2021 and 2023. Successful well testing of Lockyer Deep-1 in 2022 to a depth of more than 4,000 meters has already identified a significant gas discovery, which tested at rates over 100 million cubic feet of gas per day. In Q3 FY23, MinRes commenced a new drilling campaign for up to seven wells in the Perth Basin. Drilling of the Lockyer-2 well, located 3.2 kilometres north-east of the Lockyer Deep-1 well, was designed to appraise the original discovery. The primary target for Lockyer-2 – Kingia Sandstone – was reached at 4,347 meters with low levels of background gas evident. While the target reservoir was excellent quality, analysis of wireline logging data indicated the reservoir is water saturated and the aquifer is at a much higher pressure than previously interpreted. Also in Q2 FY23, MinRes announced an off-market takeover bid for Norwest Energy (Norwest), a minority joint venture partner in the Lockyer Deep project, with the view that acquiring Norwest would help unlock the full potential of the asset and create lasting value for both groups of shareholders under MinRes ownership. The Norwest board unanimously recommended its shareholders accept the scrip-based offer. By Q4 FY23 MinRes had successfully acquired a relevant interest in more than 90 per cent of Norwest shares and immediately exercised its right to compulsorily acquire the remaining Norwest shares. In Q3 FY23, MinRes commenced drilling at North Erregulla Deep-1 (NED-1), approximately 8.3 kilometres south-east of Lockyer Deep-1. Successful drilling to a depth of more than 4,000 metres uncovered an excellent quality 37-metre gross reservoir