Bounty has agreed to transfer its interest in PL214 to settle the dispute with operator New Hope Corporation in return for $300,000 cash, having $500,000 in claims and liabilities being dropped, and 100% control of the Alton oil field in the southern Surat Basin.
The litigation around ongoing operations and joint venture costs will be discontinued.
As a result, Bounty will be operator of Alton, and will have 100% in a potential 353,000bbl of 2P oil, the Alton production facilities and the surrounding PL2 exploration acreage.
There are 167,000bbl of recoverable oil from the early Triassic-age Evergreen sand reservoir included, with a potential 1.136MMbbl of 2P reserves located in the three sands of the Boxvale/Evergreen Formations within the Alton and Alton SE blocks and a further 186,000bbl in the nearby Eluanbrook Block that Bounty (81.75%).
Bounty also owns 50% of the surrounding ATP 745P, which comprises two large blocks to the east and west, where Bounty sees significant upside.
Bounty is understood to have been negotiating its exit from Utopia for more than a year, with its main aim being to consolidate control over the Alton area, where some 2MMbbl has been produced since 1964.
The minnow believes there is considerable potential for further reserve additions with undrilled locations and attic oil in the Evergreen Formation and possibly extensive oil in the lower Showgrounds Formation which has been proven as a high productivity sand in the area.
The company, which recently started seeing revenue flowing from its modest Tanzanian gas well, is planning a low-cost 2-3 well workover program with the aim of re-establishing production within six months.
Oil production is expected to exceed Bounty's share of Utopia, which was only generating it around $110,000 a month from Utopia from a share of production of 22boepd.
Beyond that, Bounty managing director Phil Kelso said there was significant upside from three undrilled locations plus enhanced recovery and later an appraisal well at Eluanbrook, all of which would be taken into account as the company works on full field development plans.
Alton is 370km west of Brisbane and oil will be transported and sold into the Brisbane Refinery.
Last year New Hope secured the Moonie, Alton and Cabawin fields for $3.5 million, and Bounty used its pre-emptive right to acquire Santos' interest in PL 2A, ending a four year push to secure the Alton area.
It also hopes to drill an appraisal well of the 1985 Eluanbrook discovery.
Eluanbrook-1 flowed over three months, initially at 15 barrels of oil per day with a 64% water cut, declining to an uneconomic 1.5bopd with more than 80% water.
By focusing only on the higher reservoir the company believes it can establish better flowrates of light, 54 degree API oil.
At Utopia, New Hope is planning to service up to four wells and increase production at that field, which is set to be moved to unmanned operations at the facility to improve field netbacks.
