Queensland Gas Limited, Icon Energy and Pangaea Oil & Gas today reached agreement to settle the litigation which had stalled the development of permits ATP610P, ATP620P and ATP648P. Icon agreed to sell its interests to QGC and Pangaea for $1.5 million.
ATP620P contains the Argyle pilot project, which adjoins the Berwyndale South field (100% QGC) - the anticipated source of CBM for a gas sales deal between QGC and CS Energy in December last year.
The parties have already drilled five wells at Argyle in ATP620 with encouraging results. The uncertainty created by the litigation had prevented Argyle from being the first CBM field to be commercialised from the Surat Basin.
"Now that we have clear and defined title as a result of this settlement, we are hopeful that the first sale of gas from ATP620P will occur as early as 2005", said Richard Cottee, Managing Director of QGC, the project's operator.
"The beauty of this agreement is that it not only settles the litigation, but also establishes commercial parameters for the development of Argyle and other promising leads in ATP620P. "We're confident that a newly negotiated Joint Operating Agreement will ensure that the issues at the heart of the litigation should not be repeated", he said.
QGC will pay Icon a sum of $900,000 by 30 June 2003 with the remainder in installments until 31 December. However, Pangaea will be responsible for 50% of the consideration payable to Icon and will take half of the transfer on a back to back arrangement with QGC. Icon intends to invest the proceeds in its existing prospects in the USA.
