Novus Petroleum, as part of the Padre Island Joint Venture, said under terms of the agreement, the company will receive a carried 10% interest on any ultra-deep well drilled.

In addition, Novus will be able, on a well-by-well basis, to retain a small paying interest in these ultra-deep prospects, with the remainder of its 40% working interest subject to the carry.

"We have leveraged our acreage position so that we are able to participate in some potentially valuable prospects that otherwise probably would never have been explored by Novus," said Novus managing director, Dr Bob Williams.

The agreement gives BP nine months to complete a full technical study and to mature prospects to be drilled. An option payment is payable to the PIJV by BP on signature.

The interests in the Padre Island Joint Venture are as follows: Novus Petroleum 40%, BNP Petroleum Corporation - operator 30%, MOEX Texas Oil & Gas LP 20%, Long Flat Ltd (Golden Gate Resources) 10%.