Adelaide-based Beach recently boosted its West Australian exposure by taking Lattice Energy off Origin Energy's hands, a deal which included half of AWE's prized Waitsia onshore gas project which has performed spectacularly of late.
Now it has acquired equity in North West Shelf permits WA-359-P and WA-409-P in the Carnarvon Basin offshore WA which contain the giant Ironbark prospect which Cue believes has a best technical estimate of 15 trillion cubic feet of prospective recoverable gas resource.
The deal also improves Ironbark's prospects of competing for NWS ullage expected from 2021, with Woodside Petroleum also trying to convince its NWS partners to commercialise its undeveloped Browse fields through the Karratha gas plant.
Ironbark is less than 50km from NWS LNG's North Rankin platform and is close to Woodside's Pluto and Chevron Corporation's Wheatstone LNG infrastructure, giving Cue, Beach and possible BP cost-effective commercialisation options.
Last month Cue gave BP a further two months to take up its option, which also gave the junior more time to find and secure a farminee, which has ended up being $2.34 billion market cap company Beach.
Cue has also given Beach a option over 7.5% equity in exploration permit WA-409-P next door which will free carry Cue for the same percentage of the costs of drilling a well in that block and give it a 10% royalty on all future revenue from Beach's stake.
Beach has until July 2019 to exercise that option.
Beach already has a 7.34% share in the Santos-operated WA-281-P permit (47.83%) with Chevron (24.83%) and Ichthys LNG operator Inpex (20%) in the Browse Basin; and half of PEP 52717 with New Zealand Oil & Gas (operator) about 40km off New Zealand's South Island's east coast.
Cue CEO Matthew Boyall, whose company has now conditionally secured 75% of funding for the Ironbark-1 exploration well, said the new agreements with Beach showed the confidence that another major company has in the prospect.
Cue currently retains 36.5% uncommitted equity in WA-359-P and it's still talking to other companies keen on forming a joint venture with Beach and BP to share in the high-impact opportunity.
