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The group must now complete native title arrangements as a precondition to the grant of exploration permits over each block.
If these arrangements are successful, Drillsearch will hold one lease while Circumpacific will hold the remaining seven.
“When granted, these blocks will expand the Group’s Cooper-Eromanga Basin acreage to 21,700 square kilometres,” the company said yesterday.
“Drillsearch now has a commanding land position in southwest Queensland with production, long-life reserves and strong near-field exploration upside. This move reinforces Drillsearch’s strategy of focusing on core areas in basins with proven hydrocarbon systems, close to oil production facilities and where Drillsearch has experience with high success-rate drilling.”
These blocks are near Drillsearch’s oil production and exploration permits (totaling 7095sq.km) in the Cooper-Eromanga Basin at Chandos (ATP-783-P), Naccowlah (ATP-259-P) and Tintaburra blocks (ATP-299-P).
“A number of the new blocks are adjacent to producing oil and gas fields in the Cooper-Eromanga Basin and have proven hydrocarbon systems,” Drillsearch said.
“The blocks will generate many new exploration and farm-out opportunities going forward.”
One permit is adjacent to the prolific Jackson-Jackson South oil fields within the Naccowlah Block and also adjacent to major Cooper Basin gas fields.
In two other blocks, Drillsearch and Circumpacific will explore for Eromanga-sourced oil near the prolific Inland Field which produced at 3000 barrels per day when discovered in the mid 1990s.
Two other blocks are adjacent to Beach Petroleum’s Kenmore Field and Drillsearch’s Tintaburra Block where 3D seismic and drilling over the past two years has proved major new reserves of high-quality light oil.
“Drillsearch will explore the blocks applying the same 3D seismic and low-cost drilling techniques that have been so successful in lifting Drillsearch’s 3P reserves to 6 million barrels of oil through its participation in the Cooper Oil Project,” the company said.
Drillsearch plans to start native title negotiations and technical planning in early 2008.