ConocoPhillips gets Browse basin interests

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Oct. 10 -- Karoon Gas Australia Ltd., Melbourne, has farmed out as much as 60% of its interests in two Browse basin permits off Western Australia to ConocoPhillips.

Under the two-part farmout agreement ConocoPhillips will earn a 51% interest in both permits (WA-314-P and WA-315-P) by paying Karoon $9.6 million as reimbursement for 80% of Karoon's spending on acquisition and interpretation of 1,200 sq km of 3D seismic and 800 km of 2D work.

ConocoPhillips then will fund 80% of the cost of the continuing work program that includes the drilling of a well on each block during the next 12 months.

In the second stage arrangements ConocoPhillips has the option to move to a 60% interest by paying 80% of the next $125 million of the joint venture's expenditure.

The deal greatly reduces Karoon's financial commitments in what is a high-cost program while enabling the company to be part of an area of high potential.

The contiguous permits are just 10 km from Woodside Group's huge Torosa, Brecknock, and Calliance gas-condensate discoveries estimated to contain 21 tcf of gas and 210 million bbl of condensate.

Other Browse discoveries nearby are Nexus's Echuca Shoals and Crux fields and the Inpex-Total SA joint venture's Ichthys gas-condensate field.

ConocoPhillips's move into Browse basin is a significant addition to its already strong position in the Bonaparte basin and Timor region of northern Australia where it is operator and majority holder of the Bayu-Undan field feeding its Darwin LNG plant. The company, in partnership with Santos Ltd., also has title to the Barossa gas field and the recently found Caldita gas field north east of Darwin.