Scrubby-1, the second of a three-well program being undertaken by Golden Dynasty in Production Licence L8, spudded last Thursday and is now over 166m down to its 1245m target depth.
Golden Dynasty has the right to earn up to an 80% equity in European Gas subsidiary Terratek Drilling Tools – the holder of Exploration Permit 129, Production Licences L6 and L8 covering 1470 square kilometres.
In addition to its diluted equity interest in Terratek, European Gas will retain a 2% wellhead royalty in the permit and licences.
Golden Dynasty is the operator for the drilling program on behalf of Terratek and is required to spend a total of $A3.5 million in exploration expenditure and research.
Outside of the Terratek agreement, European Gas also holds 28,700sq.km, which are currently under a sale process with Arc Energy.
European Gas was formerly known as Kimberley Oil.
