Metgasco Ltd., Sydney, has made an agreement with Adelaide companies Senex Energy Ltd. and Cooper Energy Ltd. to farm in to area surrounding the current Frey-1 wildcat within PEL93 of the South Australian Cooper basin for a 20% working interest.
The deal is dependent on the outcome of drilling and testing of the wildcat, which spudded last weekend. It has a proposed total depth of 1,502 m.
Metgasco says the Frey prospect has the potential for stacked pay in multiple formations. The large structure has been mapped as a 4-way dip closed anticline. 2D seismic interpretation indicates 30 m of closure within an area of 9.5 sq km at the lowest closing contour.
Several oil fields are nearby, enhancing the economics and potentially enabling a fast and cost-effective development of any discovery.
If the well is successful and Metgasco elects to proceed with the farm-in, it will join the combine as a 20% participant in registering a PRL over the Frey-1 area.
Metgasco will then be responsible for paying 30% of the aggregate costs associated with the Frey-1 drilling program up to a maximum aggregate cost of $2 million (i.e., Metgasco will pay as much as $600,000).
Frey-1 is regarded as a relatively high-risk, high-return oil exploration play with potential to trigger a revival of exploration in the southwest sector of the Cooper basin.
The farm-in deal marks a return to active petroleum work for Metgasco, which originally ran gas exploration programs in the Clarence-Morton basin of northern New South Wales. In December 2015 the company accepted $25 million (Aus.) offer from the New South Wales government to withdraw from its three permits in this region and from litigation against the New South Wales government following a concerted campaign from the anticoal seam gas lobby.
