Perth-based Westralian Gas and Power and its joint venture partners – two companies linked with Hardman Resources founder Alan Burns – have signed a $37 million heads of agreement with Roc Oil assigning it the rights to explore and drill two wells in two offshore Vlaming Sub-basin petroleum permits W05-21 and W05-22.
These blocks cover 4530 square kilometres off the Perth coast, stretching south from Rottnest Island to Mandurah.
Under the terms of the farm-in agreement, Roc has acquired a series of three options that can be sequentially triggered by funding a three-stage work program.
Roc has already committed to funding the first earning stage in which it will acquire an initial 20% interest in the two permits and be appointed operator, by funding 100% of $A2 million of pre-seismic exploration activity.
Westralian chairman Peter Briggs said Roc intended to also commit to the second earning stage whereby it will acquire an additional 20% interest in each permit by funding 100% of a A$5 million 2D-3D seismic program.
If Roc committed to the third earning stage – the funding of 100% of a well in one or both permits up to a total cost of A$15 million per well – it would earn an additional 40% interest in the permit in which the well was located.
On this basis, if Roc exercised all its options it would acquire 80% interest in each permit for a total cost of A$37 million.
Briggs said the deal provided free carry for Westralian with all exploration costs through to production met by Roc Oil.
“Roc is a strong player with a wealth of experience in exploration and production within the Perth Basin so they are a natural fit for us,” Briggs said.
“The leases, on Perth’s doorstep, are strategically located close to the Kwinana refinery and are described by the Department of Industry and Resources in promising terms.”
Westralian holds 50% in the two permits. Its two joint venture partners – Lempika and Emphasize, which hold 25% each in the blocks – are family companies of Alan Burns, a Westralian director of WGP.
Briggs said Roc’s experience in the Perth Basin was nicely matched by Burns family companies’ activities on the same acreage.
