MELBOURNE, Nov. 14 -- Lakes Oil NL, Melbourne, has farmed out two of its onshore Gippsland basin permits with tight gas potential to Denver-based PetroHunter Energy Corp. and its subsidiary Sweetpea Petroleum Pty. Ltd.
PetroHunter-Sweetpea will invest $9.3 million (Aus.) to farm into 33.33% of Lakes' permits (PEP157 and PEP159) near Sale in southeast Victoria.
PetroHunter will also subscribe for $4 million in new shares in Lakes Oil at 1.5¢/share.
PetroHunter will have the right to gain further interest with two additional 16.66% farm-in tranches of $13.3 million each, exercisable within 12 and 24 months respectively.
PetroHunter also will assume operatorship and will be invited to have a representative on Lakes' board.
Lakes Oil has for several years endeavored to commercialize its gas reserves in tight reservoirs of the Strzelecki formation that underlie the prolific conventional Tertiary-age oil and gas reservoirs in Bass Strait.
The Strzelecki sediments, which are closer to the surface, are more accessible to the drill and to pipeline infrastructure on the onshore Gippsland permits.