Octanex N.L. announces that the Operator of the Joint Venture exploring the WA-323-P and WA-330-P permits, Santos Offshore Pty Ltd , has confirmed the finalisation of agreements to acquire a new 3D seismic survey within the Permits and to take an assignment of a rig to drill a well inWA-323-P.
The Permits are located in the Dampier Sub-basin offshore from Western Australia . The Permits were both renewed for further 5 year terms on 6 April 2011.
Santos Offshore entered into a farmout agreement with the Company that became unconditional in May 2011. Santos Offshore is a wholly-owned subsidiary of Santos Limited . Under the terms of the farmout, Octanex assigned a 75% participating interest in the Permits to Santos Offshore and retained a 25% participating interest.
Santos Offshore agreed to acquire a new 3D seismic survey across the Permits and to drill a well. Santos Offshore will pay 100% of the acquisition, processing, mapping and interpretation costs of the new 3D survey and 100% of the costs of drilling the well.
Octanex has now been advised by Santos Offshore that this new 3D survey has been contracted to commence as early as 21 October 2011. It will be acquired by the vessel “Western Spirit”. The survey, to be named “Winchester”, will be of 675 km2 and take approximately 30 days to complete.
Santos Offshore has also confirmed that it recently entered into an assignment agreement in relation to the Ensco 109, a jack-up drilling rig. The rig is contracted to drill the farmin obligation well into the Winchester prospect from a yet to be determined location within the area of the WA-323-P permit. The rig slot assigned to Santos Offshore means the well is currently scheduled to be drilled in Q3 2012.
Octanex Comment
As previously stated, Octanex is delighted to have secured a farminee of the calibre and substance of Santos. Santos has considerable experience drilling in the Carnarvon Basin where the Permits are located and, as important, experience with the marketing of gas produced from the area.
The Company believes the Permits have substantial potential and geological merit, being adjacent to a number of large gas/condensate fields. While there are challenges associated with accurately imaging the sub-surface, nevertheless there is evidence of hydrocarbons having been trapped in the area and clear evidence of a working hydrocarbon system. Santos has made it clear they are committed to an in-depth exploration of the Permits, including the commitment to drill a well.
[mappress] Source: Octanex , October 20 , 2011