MELBOURNE, May 19 -- Italy’s Eni SPA farmed into MEO Australia Ltd.’s NT/P68 permit in the Timor Sea, estimated to contain the potential 5 tcf Heron natural gas discovery.
Binding agreements were signed under which Eni will be operator and can earn a 50% interest in the Heron discovery by funding MEO’s costs for drilling two wells, one each in the Heron North and Heron South prospects.
The aim is to determine whether the Greater Heron area contains a large enough gas resource to underpin a LNG development project.
Eni has 60 days after drilling the first well to decide whether to drill the second or withdraw from the agreement.
The company also has an option to earn 50% of the nearby Blackwood gas discovery in the same permit by carrying MEO’s costs of acquisition of a minimum of 500 sq km of 3D seismic and the drilling of one well in the Blackwood area.
If Eni funds MEO’s share of the work program required to reach a final investment decision in either Heron or Blackwood, it will acquire a further 25% interest and make a one-off bonus payment to MEO.
MEO secured environmental approvals and completed preliminary design for an LNG development in 15 m of water at Tassie Shoal just 75 km away.
Eni is operator and sole owner of the Blacktip gas development in the southern Bonaparte Gulf, which delivers gas via a subsea-onshore pipeline to Darwin. Eni owns the Kitan oil field in the Timor Sea, which is due on stream during this year’s second half.