Strike Energy Ltd., Adelaide, farmed out a 45% interest in the onshore North Perth basin Walyering prospect (permit EP447) to Talon Petroleum Ltd. in exchange for a free carry in drilling the forthcoming Walyering appraisal well.
Strike will retain a 55% interest and operatorship.
If the appraisal well, timed for 2021, proves up a commercial development, it will be a catalyst for exploring other leads in the permit, Strike said.
The farm-out will enable Strike to focus its balance sheet on capital required for the planned West Erregulla gas field development also in the North Perth basin as well as benefit from cost savings by adding the Walyering appraisal to its West Erregulla development drilling program in 2021.
Walyering is a conventional gas discovery in the Cattamarra Coal Measures, a play that has been enhanced by commercial production from nearby Red Gully and Gin Gin fields. Walyering is close to existing gas infrastructure and industrial gas customers.
Strike acquired the Walyering permit in 2018 and has since run a 3D seismic survey that indicates the presence of a wet gas accumulation up-dip of the Waylering-4 location.
Under the terms of the agreement, Talon will free-carry Strike up to $6 million (Aus.) of the planned $9-million well along with associated geological and geophysical studies within the permit.
Talon will be offered a first right of refusal for 5 years on farm-in rights for permit EP495, on trend and to the north, which contains the Ocean Hill gas discovery, should Strike begin marketing of a potential farm-out of that permit.