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In a note to shareholders this morning Norwest said the Western Australian Department of Mines, Industry Regulation & Safety had given the two companies some reprieve given COVID-19 restrictions and the recent oil price crash, to allow for additional time to drill an exploration well.
MinRes had previously flagged the delay to its work program, saying in its quarterly all nine permits it owns across the Perth Basin, including the assets it owns with Norwest, would likely be shelved for around 12 months.
The Lockyer Deep-1 well was previously required to be drilled and completed by the end of June this year; however, given the current economic climate and COVID-19 pandemic restrictions, the operator will have more time to contract a rig and drill the well.
Norwest said the JV is currently looking to secure an onshore rig to drill at "the earliest opportunity."
Managing director Iain Smith noted there was a buzz of activity in the Perth Basin to come this year, with seven wells now planned by other operators later this year.
Smith also said oil and gas companies were collaborating to jointly secure rigs for multi-well programs to reduce costs.
From a purely speculative slant, gas produced from Norwest and MinRes' project could potentially flow to a new processing plant announced by fellow Perth Basin operator Strike Energy.
In the company's quarterly report released late last month, Norwest said it was still optimistic it would drill the Lockyer Deep-1 exploration well this year.
The well will target the Kingia gas target, at around 3900 metres, a shallower depth than the West Erragulla-2 well drilled by Strike Energy.
Norwest suggests a geological chance of success of 38% for the Kingia, but has attributed no GCOS to the shallower Wagina target despite it unexpectedly yielding gas at West Erregulla-2.
Norwest was unchanged at noon today with a shareprice of 0.3 cents. Venture partner MinRes shares were worth $19.32 per share.
The WA Department of Mines announced it would allow suspension of work program commitments on "force majeure grounds" earlier in May. Applications are considered on a case-by-case basis.
