Under the deal, Apache would spend an estimated $10 million recording and processing about 500km of 3D seismic data, plus $15 million to drill one exploration well.
Bass Strait and Inpex each plan to contribute 30% from their respective 50% permit interests. As a result, Apache will fully fund their combined 40% stake through the agreed seismic and drilling program.
If Apache decides not to drill a well after funding and completing the 3D seismic commitment, the 60% interest will be transferred back to the joint venture partners.
The farm-out agreement is subject to the JV securing a permit variation and receiving the necessary regulatory approvals, as well as the completion of the seismic survey within an “appropriate timeframe”, Bass Strait told the ASX yesterday.
Bass Strait chief executive Andrew Adams said Apache would bring to the partnership “high levels of technical competence, as well as the operational experience and scale to secure competitive drilling contracts in the current tight rig market”.
“This partnership will inject fresh impetus into the exploration of Vic/P42.”
March 2005 was the last time activities were reported in the permit, after Bass Strait Oil announced that its ZaneGrey-1 well had found no hydrocarbons. This news caused shares in the Melbourne-based junior to plummet more than 60%.
Expected to start in the fourth quarter of this year, the farm-out seismic recording will be the first 3D survey in the western and north-western areas of the Vic/P42 permit. The shoot is designed to complete continuous coverage between Bass Strait’s 2002 3D survey in the east of the permit and Apache’s 2005 3D survey in neighbouring Vic/P58.
Several leads have been identified on older 2D seismic data in the farm-out 3D area, including leads analogous to the nearby Dolphin and Perch producing oil fields, according to Bass Strait. The new 3D survey will also cover the 1983 Omeo gas and condensate discovery.
Following positive reprocessing results, drilling is expected to start in mid-2007.
Bass Strait said it was also seeking farm-in partners to its Vic/P41 permit to earn an interest by funding drilling based on existing 3D seismic data.
Last year, the Vic/P41 JV recorded the permit’s first 3D seismic survey, which detailed several high-potential prospects, including analogues of the Kipper and Basker fields, the company said.
