Santos Ltd., Adelaide, has farmed into the Amadeus and Pedirka basin permits in Central Australia owned by Central Petroleum Ltd. of Perth.
Santos will earn as much as 70% in 13 of Central’s permit and application areas during a three-stage exploration program and assume the operatorship.
To start, Santos will fund the first stage with $30 million (Aus.) worth of seismic acquisition and an appraisal well program. Upon completion of this, Santos will have the option to increase its interest to the maximum 70% in exchange for completing additional seismic work and appraisal drilling to the value of $60 million for each of the next two stages.
The first part of this program will begin early in 2013.
Santos already operates the existing Mereenie oil field, which lies east of Central’s successful Surprise oil field discovery made last year.
Santos says the proposed program is complementary to and a natural extension of its Mereenie operations and provides the company with the opportunity to add scale and presence in central Australia.
Central will be free-carried through the seismic surveys, the well assessment program and other exploration costs.