The agreements are designed as multi-stage farm-ins with firm and option wells.

In the first stage Mosaic will fund 70% of a $640,000 2D infill seismic acquisition program and 35% of a 20km seismic reprocessing program, to earn the option to fund 46.667% of a well in the Stratton Block of ATP 608P. This will give it a 35% stake in the block.

Mosaic will then have the option to fund, in the second stage, the cost of a 300km seismic reprocessing in other Bow tenements, earning it the option to help fund the costs of drilling wells in five other blocks.

These include 70% of the costs of a well in Rookwood Block of ATP 608P for a 35% interest in the block and 100% of the costs of a well in each of ATP 664P, ATP 706P, ATP 807P Western Blocks and ATP 805P Southern Block to earn a 50% stake in each tenement drilled.

Mosaic will also fund either 35% (Rookwood Block) or 50% (other second stage blocks) of any additional pre-drill seismic acquisition and/or seismic reprocessing that may be required to mature the second stage farm-in well prospects.

An agreed exclusion area around the Donga and Rookwood oil fields are not included in the agreements.

In a separate agreement, Bow has agreed to fund 50% of the Jawsone-1 well to earn 25% in Mosaic's PL 15 farm-out Block in the Surat-Bowen Basin.

Jawsone-1 is planned for drilling as part of Mosaic's accelerated drilling program in August-September 2008.

Mosaic will operate the Bow farm-in program and continue as operator in all tenements where it earns equity.

"The firm and options agreement with Bow-operated joint ventures will provide Mosaic Oil with a substantial interest in the Jurassic Boxvale Sandstone oil exploration trend," Mosaic managing director Lan Nguyen said.

"Success in exploring this oil trend would provide Mosaic revenue diversification from increased oil production in this sustained high oil price environment.

"This deal could potentially add up to six wells to Mosaic's operated drilling program in the period from 2008 to 2010."