Rick Wilkinson
OGJ correspondent
MELBOURNE, May 26 -- Korea National Oil Co. (KNOC) and Seoul City Gas Co. Ltd. (SCG) have farmed into the Vic/P56 and Vic/P49 permits operated by Nexus Energy Ltd., Melbourne, in the Gippsland basin off Victoria.
KNOC and SCG will fund the initial drilling costs in the permits to a maximum of $15 million (Aus.) along with the majority of any evaluation and testing costs associated with the proposed first well on the Culverin-Scimitar prospects.
In return, KNOC will earn a 30% interest in each permit, while SCG will earn 20%. Nexus will retain the remaining 50% and be operator.
Recent 3D seismic surveys have identified reservoir potential in the Tertiary Top Latrobe formation at the Culverin prospect and Tertiary Intra Latrobe-Golden Beach at Scimitar.
The prospects overlie each other and straddle a common permit boundary. They will be evaluated with the one well.
The contiguous Vic/P56 and Vic/P49 permits are close to existing Bass Strait discoveries. ExxonMobil Corp. and BHP Billiton's producing Flounder field is immediately to the northwest, while the same partnership's producing fields Halibut, Fortescue, and Marlin lie just to the west.
BHP Billiton's Blackback field is to the south, and the Anzon Energy Australia Ltd. group's Basker, Manta, and Gummy fields, currently being evaluated for development, lie to the north.
Nexus hopes to drill Culverin-Scimitar during the fourth quarter.
In the Gippsland basin, Nexus confirmed a 316 bcf gas discovery at the Longtom prospect on Permit Vic/P54 closer to the Victorian coast earlier this year in which Apache Energy Ltd. is operator (OGJ Online, Mar. 31, 2005).
