The Sydney-based company today said Avery has agreed to drill two wells in ATP 709P and to acquire 80-100 square kilometres of 3D seismic data to earn a 50% working interest in ATP 709P.
It will also acquire an option to participate at a 50% working interest level in drilling two new wells in the Taylor oil and gas field area.
Mosaic said under the deal, Avery will pay over $5 million within 12 months after the execution date of the farm-in agreement.
ATP 709P contains the Rockhampton High-1 oil discovery and two oil prospects, both east of the Taylor oil and gas field.
“Mosaic believes the proposed farm-in 3D seismic data acquisition program will significantly reduce the appraisal/development risk of future Taylor area wells,” it said.
The Taylor oil and gas field has produced over 16 billion cubic feet (Bcf) of gas and 1.8 million barrels (MMbbl) of oil/condensate from the Triassic Showgrounds Sandstone.
Mosaic said the remaining upside potential (3P) of over 8Bcf of gas and 1MMbbl of oil/condensate requires additional wells to confirm and produce.
Mosaic said the farm-out deal is the continuation of its strategy of farm-outs to better manage risk and accelerate exploration and production in its Surat-Bowen Basin asset portfolio.
“The estimated firm expenditure of over $5 million to be funded by Avery for the seismic acquisition and the drilling of two firm ATP 709P farm-in wells clearly demonstrates their recognition of the excellent oil and gas prospectivity of the area,” managing director Lan Nguyen said.
Under the agreement, Mosaic will remain operator of the farm-in areas during and after the farm-in period and retain its 100% interest in all existing Taylor field wells.
Upon completion of the farm-in, Mosaic’s working interest in ATP 709P will be reduced from 100% to 50%. Its working interest in the future wells drilled in the new Taylor field 3D seismic coverage will be 50% if Avery exercises its option.