New Zealand Oil & Gas Ltd. (NZOG), Wellington, reached a conditional agreement to farm into the Western Australian North West Shelf permit WA-359-P that contains the large, undrilled Ironbark prospect.
The permit is held by Cue Energy Resources Ltd., which is a 50.01%-owned subsidiary of NZOG.
BP Developments Australia Pty. Ltd. and Beach Energy Ltd., which each hold conditional agreements to enter into the permit, have now signed a coordination agreement with Cue and NZOG.
NZOG has agreed to take 15% equity in WA-359-P by paying 17.85% towards the cost of the Ironbark-1 wildcat and will pay an initial consideration of $642,000 (Aus.). The terms of NZOG’s farmin are the same prorata as those of Beach’s agreement signed in November 2017 to acquire 21% equity in the permit (OGJ Online, Nov. 30, 2017).
The agreement is conditional on regulatory approvals and approval of Cue shareholders and all conditions must be satisfied by June 30, 2019.
Currently Cue still holds 100% of the permit, but once all conditions are met the new interests will be BP 42.5%, Beach 21%, Cue 21.5%, and NZOG 15%. BP will assume the operatorship.
Although NZOG already had an indirect involvement in the permit via its controlling interest in Cue, the company’s CEO Andrew Jefferies said the Ironbark prospect was too interesting to ignore.
“Ironbark is a genuinely world-scale prospect in a highly prospective address, with high quality partners to join in a near-term well,” Jefferies said. “We have independently performed our own assessment of Ironbark and intend to participate on terms we see as fair to both NZOG and Cue.”
Ironbark is described as a giant Mungaroo formation prospect with a mapped area of up to 400 sq km and a best technical estimate of 15 tcf of prospective recoverable gas resource. The figure is based on an internal assessment performed by Cue.
Ironbark lies less than 50 km from the NWS joint venture’s North Rankin platform. It also is nearby Chevron Corp.’s Wheatstone system and Woodside Petroleum Ltd.’s Pluto system, thus providing multiple development options if gas is found.