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Ken: It's 2025 Mike! I guess it's been 15 years since you and I started in the CSG industry. And I guess as you head Aurecon’s front end development or front end shaping group, any takeaways, any thoughts on lessons that, the industry might start to think about as the next tranche of developments in CSG start to evolve over the next couple of years?
Mike: That's a good question, Ken. And we have learnt a lot over the last 15 years going through the initial phases of the CSG to LNG industry. One thing that really sticks out in the front end is the fact that the subsurface disciplines have the hardest job in that front end work.
So what I mean by that, those disciplines of geology, geophysics, petrophysics and well engineering, have the extraordinarily difficult task of not only finding the reserve but they need to quantify it. And they need to figure out a way to get that reserve to surface and then quantify the rate at which that gas comes out of the ground.
Now, the quicker the surface facilities team can complete that design, get it costed, complete the economics and work out what the value is of that resource, and then get that back into the hands of the subsurface team enables them to start to refine their development. They will take some of the poorer areas out if they need to higrade it to make it work from an economic perspective, or if it's massively economic, they can start to bring some other tenure in and backfill those surface facilities and increase the value proposition there.
So that work can take as little as a week or, if you don't have the right tools, that can take six, seven, eight months. So that front end surface facilities team needs to be geared towards understanding the value proposition, which goes back to the subsurface team to refine their development and as a result, get the pecking order right for the FDP.
Ken: You know, you're saying to me the other day that the tool that you've developed in the Aurecon front end group would sort of really enable that process and lean on all those years of experience that I guess you've had on sort of both sides of the fence, both within the operations side and I guess on this side of the fence, you know, helping our customers so...
Mike: Absolutely. I mean, we want to drive the timeframes down towards the lower end of that so we can complete those surface facilities designs in a standardised and auditable fashion such that the subsurface team and our clients' companies have belief in what's coming through, make it easily assured, knowing that it's the right information that comes out of their own systems.
The role of assurance, in its simplest form is to protect the company from making poor decisions. And I've sat on both sides of that fence, as an assurer as well as a development manager putting my designs through for assurance. Front end teams can spend months, if not years, developing these concepts that will end up costing hundreds of millions or even billions of dollars, and some of these step out plays that are going to come through the next tranche of work in the CSG industry.
So looking at it from the role of an assurer, an assurance team, maybe has two or three people and they get a week to assure that 12, 18, 24 months worth of work. So as a result, the assurance package of information that goes through to that assurance team needs to be clear, concise, standardised if possible so the assurance team know what they're going to get in the format in which it's going to come, and auditable and traceable to enable them to spend that week that they get. Out of that week, they'll spend three days reading the reports, one day with a presentation and a Q&A with the project team, and then a day to make their recommendation to either progress the development, recycle the development because not enough work has been done, or put the development on hold.
And so as a result making the output of that 18 months work easily assurable enables faster progression through that assurance process. It leads to a better assurance outcome.
Ken: Mike, can you just expand on how some of the non-technical aspects of front end development are actually just as important and influential as the technical aspects in field development plans?
Mike: It's a very important point, Ken. Front end development is not just a technical exercise. And even though a great deal of the costing comes from the infrastructure that gets put down by a technical team, there are a lot of things that need to be considered in terms of putting together a front end development, and those non-technical disciplines have a say on the way through the development process and also need to endorse it at the end.
I'm not just talking about the environment teams and what we’re required to do under the environmental agreements under the ATP’s or the PL’s, in terms of protection of endangered flora and fauna. It goes a lot deeper than that. Clients will have tenure obligations for these tenures through to the government that need to be met.
There will be social performance commitments to the local communities that need to be considered throughout that development. There'll be Indigenous and non-Indigenous cultural heritage that needs to be respected throughout these fields and through these developments.
Construction and operations input is paramount, so we ensure that throughout the estimating phase that the project manager building the facilities has enough money to do so, and OpEx has been correctly accounted for to ensure that the operations can function safely and efficiently.
Ken: And I guess there’s the landholders as well, they’re just as important?
Mike: Absolutely, I mean, they're paramount, infrastructure will go onto their land. You know, these developments don't buy the land outright. We lease part of the land off those landholders. Their rights and desires, we need to consider throughout the development process.
