The Cooper Basin explorer said it has wrapped up a $7 million farm-out to South Korean energy company, Seoul City Gas, which is earning a 25% interest in the permit.
The first phase of work involves drilling two appraisal wells, Flax-3 and Flax-4, which will then be fracture stimulated along with the earlier Flax-2 well. In addition, the discovery well, Flax-1, will be converted into a gas-injection well.
Innamincka said the $7 million farm-in payment will be used to reduce its bank debt to $4 million. It hopes to eliminate the remaining debt with funds from the current $15 million share placement.
At the beginning of last year, an independent team determined Flax had the potential to contain 3.2 million barrels of mean oil reserves.
PEL 103 is Innamincka’s main oil and gas permit, in which it now holds a 75% interest.
