STRATEGIC ENERGY RESOURCES LIMITED - ASX: SER

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Description

A versatile explorer with a diversified portfolio of explorationassets in mineral and oil exploration assets in Australia. SER is a publically listed Victoria based exploration company focussed on exploration and development of acreage holding potential for finding large deposits and bringing these projects to production. SER’s world class Graphite Project at Uley in South Australia presents an exciting opportunity to take advantage of current graphite market and generate a substantial return on investment.

* A diversified portfolio of assets in a number of locations around Australia with large upside potential with high-impact discovery potential.
* A highly capable management team, including access to geological expertise.
* 100 % ownership of world class deposit at Uley, South Australia, which contains high-grade flake graphite.
* Interests in four offshore petroleum exploration permits in the Gippsland Basin, Victoria, and in onshore petroleum exploration block in the Cooper Basin, South Australia.
* Mineral exploration licences for projects in South Australia and Western Australia.

PEL-182 - (SER 37.6%) ONSHORE PETROLEUM EXPLORATION - COOPER BASIN , S.A

Four wells have been drilled since the permit was awarded resulting in one gas discovery at Vanessa-1 and an oil recovery at Emily-1. Both wells have been cased and suspended for future return and evaluation. The gas at Vanessa occurs in multiple Permian sand layers. Drill-stem tests flowed gas to surface at 5.1 and 3.9 million cubic feet per day. A third test failed to flow gas and may have experienced a tool malfunction. During the third test the test tools became stuck and the well was plugged back and redrilled in a sidetrack. This was cased as a future gas producer. At Emily, 1.3 barrles of light sweet oil was recovered from a drill-stem test from a 1 metre oil leg at the top of a 6 metre thick Lower Birkhead sand. It is possible that an updip re-drill of Emily-1 will result in a thicker oil column being established.

VIC/P47 - SER 25% GIPPSLAND BASIN OFFSHORE VICTORIA

Vic/P47 Permit Vic/P47 is located approximately 5 km offshore, south of the Victorian town of Orbost. Water depths range from 20 to 80. The permit contains the 1989 Shell Judith-1 Emperor Subgroup gas discovery and the sub-commercial Moby-1 gas discovery in the Gurnard Formation. The Judith-1 well intersected a number of interpreted gas columns based on shows, logs and pressure tests, but was not flow tested. Analogies have been drawn with the nearby Longtom gas field under development by Nexus where Longton-3 flowed gas from the Emperor sands at 77 mmcfd, and the recent Longtom-4 horizontal well intersected 760 metres of gas sands. The Judith structure is covered by a modern 3D seismic data set and has been mapped in detail.

VIC/P41 - SER 25% (Diluting to 17.5% Potenially Free Carried for the drilling of the first well) GIPPSLAND BASIN OFFSHORE VICTORIA

The Permit is located in the eastern part of the Gippsland Basin some 40 km off the coast. Water depths in this part of the basin are suitable for conventional semi-submersible drilling rigs, although water depths exceed 1000 metres in the far south of the permit. The most prospective western part of the block is largely covered by 3D seismic where a number of prospects have been defined and are ready to drill. The prospects have significant potential unrisked resource sizes ranging from 20 million barrels up to 155 million barrels. A number of the prospects display amplitude vs offset seisimic anomalies which have also been identified over the Kipper Oil and Gas Field on-trend to the west. Kipper is currently being developed with a first production data of 2009. The Oscar prospects in the southern part of the block are interpreted to be on trend and similar to the producing Basker/Manta.Gummy Fields. The eastern side of the permit is less well explored and in June 2008 the joint venture acquired 250 line kilometres of new 2D seismic data with the aim of working up a number of leads to drillable status.

VIC/P65 OFFSHORE GIPPSLAND BASIN (SER 100%)

This deepwater permit covers an area which contains a number of very large structures. It is in deepwater and some way distant from the producing fields in the Gippsland Basin. The block was applied for on the basis that in many basins in the world, discoveries continue from the shallow water areas out into the deeper water. The seismic coverage is sparse, and so in June 2008, an additional 150 line kilometres of 2D data was acquired to provide additional control over a large structural lead which was identified in the south western part of the block. The data will be processed and interpreted prior to the company seeking a farmin partner.

VIC/P66 OFFSHORE GIPPSLAND BASIN (SER 23%)

The Vic/P66 permit covers an area of 2,160 square kilometres, approximately 50 kilometres offshore in the eastern Gippsland Basin. It spans water depth from 200 metres to over 2,000 metres all within established deepwater exploration technical limits. The eastern area of the Gippsland containing Vic/P66 has been targeted for significant exploration in the past. Distance from established fields and infrastructure and increasing water depths are two factors that likely limited earlier exploration. The Vic/P66 group believes that this new permit provides early-stage exploration exposure to the potential for extensions of proven Gippsland Basin plays and also for the development of new play concepts. Given the relative lack of modern seismic data and recent exploration studies in the area, the planned Vic/P66 exploration programme consists of data collection and studies in the first two years, in preparation for 2D seismic acquisition in the third permit year. The Vic/P66 participants have interests in Vic/P41, where similar geological concepts are being pursued.

World Class Graphite Project (SER 100%)

Strategic Energy Resources owns the open-cut graphite mine at Uley on the Eyre Peninsula, South Australia. Uley is recognised as an area of world class graphite mineralisation. The graphite deposit, owned by SER, is part of the Mikkira Graphite Province, one of the largest coarse flake graphite deposits in the world, containing disseminated, high-grade flake graphite.

Discovered around 1910, Uley was worked intermittently since the late 1920s. Exploration during the 1980s led to the re-opening of the mine in 1986, but a sharp decline in world graphite prices in 1992 and an increase in freight prices caused the mine to cease production in 1993. When in operation the plant was capable of producing up to 14,000 tonnes per year and the aim was to progressively build-up to 20,000 tonnes per year rating the Uley Project as one of the largest in the world.

The mine and processing facility has been under care and maintenance since its closure. The 20 tonnes per hour processing plant is substantially intact and operable, however, requires some refurbishment. Power, water and communication lines are still connected.

The mineralisation is near to surface and the graphite produced from the former operation, was accepted by many traders for its high quality. Inferred Resources are 3.2 million tonnes at 9% total carbon.

The existing plant and metallurgical test work provide a strong platform to undertake a robust feasibility study for a 10,000-20,000 tpy operation. The mine’s products always had good acceptance from customers and provide the confidence to re-approach markets. There is a nearby workforce and substantial infrastructure with exports expected to be made through the deepwater port at Port Lincoln, some 23km away.

Technical evaluation of the resource and optimum processing route has begun. SER is also currently undertaking a review of the market for graphite.

Strategic Energy Resources is seeking investment and/or a joint venture partnership (which may wish to earn a majority interest) to upgrade the plant with reduced capital expenditure compared to that of installing on a greenfields site. The Uley project is 100% owned by SER providing the flexibility to negotiate quickly and recommence production in order to take advantage of the increased global demand and much higher prices.

Cultana – EL3547, Myall Creek EL 3538 (SER 75%, 50%) South Australia

The area contains historic copper workings, with the main target close to the old Pt Lowly workings. The deposit type sought is an ironstone associated Cu-Au with associated U. Typically these types of targets exhibit a gravity response and a likely magnetic response. The main target with the blocks has a moderate local gravity anomaly and an associated magnetic feature. Elevated geochemical values for Cu and U are reported by past operators, and a more recent FalconTM survey indicates surface anomalies.

FALCON BRIDGE EL38/1970, P38-3382-4 (SER 95%) Western Australia

The Falcon Bridge Nickel Project consists of the following exploration tenements: E38/1970, P38/3382, P38/3383 and P38/3384 in Western Australia. The project area is on the southern ultra-mafic on regional extension of the Olympia nickel discovery made by WMC on Falcon Minerals Limited (FCN) ground.

Gravity and magnetics work has identified an anomaly in the north-western corner of the EL 38-1970 known as TGMA (Toro Grande Magnetic Anomaly). The gravity model indicates an ultra-mafic unit some 800m wide at a density of 2.6g/cc, which is supported by the aeromagnetic interpretation of a zone of thickening (approximately 2km long and about 1.3km wide) of the ultramafic sequence. The ultramafic unit does not outcrop and is completely covered by thin Cainozoic deposits of transported origin.

Early exploration, by the now free carried 5% joint venture partner, included ground mapping and stream sediment sampling followed by two rounds of drilling and a 17 hole RAB drilling program and a deeper 7 hole AC drilling program. Geochemical assays and modelling suggest a nickel anomalous zone with thickness up to 34m (Ni up to 0.76%) at shallow depth (~35m). Anomalous Cu and Co values were also recorded within the zone.

There is sufficient evidence to postulate a primary nickel sulphide occurrence in the Falconbridge TGMA target that warrants diamond drilling. The proposed exploration program will include an IP survey and an extensive drilling program.

CASTERTON EL5040 – SER 5% VICTORIA

A sale and operating agreement has been executed with Encounter Minerals Pty Ltd on EL 5040, a tenement located near Casterton in Victoria. SER has sold a 95% interest in the exploration licence to Encounter Minerals Pty Ltd for a 5% free-carried interest for the first 5 years of the permit or the first $600,000 of expenditure on the work program, whichever occurs first. Encounter Minerals Pty Ltd has also reimbursed SER for back-costs associated in acquiring the exploration licence.

Mine For

oil, gas, graphite, copper, gold

Location of operation(s)

South Australia, Western Australia, Victoria

Australian Basins

Cooper, Gippsland

Address

Se 304, 22 St Kilda Rd
ST KILDA, VIC, AUSTRALIA

Phone

(61 3) 9692 7222

Email

Website

http://www.strategicenergy.com.au

Last Updated

2/02/2011