Apache farms into onshore Canning basin

Apache Energy has signed a binding agreement with Buru Energy Ltd. and Mitsubishi for Apache to farm into the latter two companies’ onshore Canning basin acreage in northwest Western Australia.

The permits predominantly cover the Goldwyer shale, prospective for shale oil and gas as well as for conventional sandstone reservoirs.

Apache will earn a 50% interest in permits 390, 471, and 473 and as much as 50% in permit 438.

The company will fund $25 million (Aus.) worth of exploration programs to be carried out on these coastal permits during 2014. The program includes two exploration wells and a 175-km 2D seismic survey.

Apache will take 25% from each of the Buru and Mitsubishi interest.

In addition Apache has been granted the option of earning up to 40% interest in exploration permits 472, 476, 477, and 478 and as much as 50% interest in 474.

For this the company will pay Buru and Mitsubishi a nonrefundable option fee of either $7.2 million (Aus.) or 80% of the cost of an aerogravity survey to be taken over these inland Acacia permits.

If at the end of the seismic program Apache acquires interest, it will fund 80% of the costs of two exploration wells in the Acacia permits and costs of two appraisal wells if drilled.

Apache will also reimburse Buru for the costs of a recent 5,000 sq km 3D survey over permit 474.

Buru will remain operator of all permits, but when the work programs have been completed Apache will have the option of taking over operatorship duties.

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