The deal allows Bounty to again become a producer of hydrocarbons, while letting Nuenco concentrate on its US interests.
The consideration is to be paid by the issue of 7 million ordinary fully paid shares in Bounty and $750,000 cash (in two tranches – January and March 2005). The deal is subject to pre-emptive rights held by Utopia Joint Venture partner Oilwells In. of Kentucky, which it has 30 days to exercise.
Bounty is purchasing all of Nuenco NL’s interest in four graticular blocks in ATP 560P, which includes the Utopia Oilfield, located about 150km north-east of the Jackson Oilfield and 50km south of the Kenmore Oilfield.
The field produces from the Early Cretaceous Murta Formation and is the largest known Murta pool in the Eromanga Basin.
The most recent technical review of Utopia (June 2004) has determined the field could contain up to 2.86 million barrels of recoverable oil (P50 estimate), according to Bounty.
Utopia is presently producing approximately 45 bopd from 3 wells and has produced about 50,000 barrels to date, said Bounty managing director Tom Fontaine.
“We are pleased once again to be a producer of hydrocarbons,” Fontaine said.
“Not only have we purchased over 1.1 million barrels of proved and probable reserves net to Bounty, but there is additional exploration potential in the area. We are looking forward to working with the operator in advancing the exploration and production opportunities in and around this field.”
Meanwhile Nuenco managing director Anthony Kain said the sale was an excellent result for his company given the consideration received and the retained exposure through the shareholding in Bounty.
“The proceeds generated by this sale plus money now in the bank means Nuenco now has over $3,000,000 at its disposal,” Kain said.
“This places the Company in a solid position to pay its way on multiple shallow wells and a deep well under the imminent aggressive drilling program planned with our [US] joint venture partners.
Gaining a shareholding in Bounty would let Nuenco benefit from any development of the Utopia asset without having to devote precious resources and management time to the prospect, he said.
“In fact the upside on the Bounty shareholding may be far greater with Bounty drilling four wells in Australia in the first half of 2005,” Kain said.
“The first two of these wells in the Offshore Perth Basin (WA-325-P (Hadda-1) and WA-327-P (Flying Foam-1) are scheduled for mid/late February 2005.”
On completion of the deal, partners in the Utopia Oil Field will be Oil Wells Inc of Kentucky 60% (operator) and Bounty Oil & Gas NL 40%.
