Key announced this morning that it has entered into an agreement to secure ownership of ATPs 783, 920, and 924 for the modest cash payment, the promise to meet financial assurance guarantees to the state government of no more than $300,000 and a 1.5% wellhead royalty on any production.

 

The trio of permits were picked up by Beach as part of the Drillsearch Energy takeover, and have since become surplus to requirements, being on the less explored eastern flank of the basin. 

 

"Key is delighted to have worked with Beach to secure this opportunity which provides the company with a cost-effective entry into the Cooper-Eromanga Basin," Key managing director Kane Marshall said.

 

"All permits are located in close proximity to established infrastructure, including the Inland Oil Refinery, and a network of gas pipelines with mapped oil and gas prospects and leads which are delineated by recent 2D and 3D seismic acquisition. 

 

"This asset acquisition is consistent with Key's exploration strategy and is considered to significantly add value to the company's existing portfolio of assets currently located in the Perth and Canning basins and we look forward to providing shareholders with an update on the Company's plans for 2017 prior to the end of the current quarter."

 

ATP 783 sits on the eastern margin oil fairway of the basin, while ATP 920 and ATP924 are in the Inland Cook Fairway.

 

Beach had signed a deal to earn 45% of ATP 924P in 2014, agreeing to finance a 150sq.km 3D survey of the block and to drill the Hurron prospect, which had a potential for between 6.4 million barrels and 48.1 million barrels. 

 

That prospect was tested in 2015 with the Maroochydore-1 well, but while it encountered oil and gas shows in the primary target Hutton Sandstone, the sands were water saturated and the well was plugged and abandoned. 

 

The data from the 2874m-deep well was being used to define other prospects around the time the Beach offer for Drillsearch was launched.

 

Drillsearch had also identified a deeper Hurron wet gas prospect with resource potential of up to 52.4 billion cubic feet.

 

Covering an area of around 2300sq.km, the ATP 924 is located between the Inland Oil Field to the north, and the Cook/Cuisinier fields to the south.

 

Three wells have been drilled in the permit to date with six prospects defined within ATP 924. 

 

Key has returned to a three-basin focus, which it set out to do in 2012. 

 

It said the new blocks were prospect-rich with low drilling costs.