Talisman consolidates in Papua New Guniea
Talisman Energy Inc. has consolidated its foothold in Papua New Guinea by farming into Sydney-based New Guinea Energy Ltd.’s (NGE) onshore western province permits PPL 268 and PPL 269.
MELBOURNE, Sept. 21 -- Talisman Energy Inc. has consolidated its foothold in Papua New Guinea by farming into Sydney-based New Guinea Energy Ltd.’s (NGE) onshore western province permits PPL 268 and PPL 269.
NGE announced in July 2008 that it had reached an agreement with a multinational oil company, but refrained from naming the company until the farm-in agreement had been finalized.
For permit PPL 269 NGE will assign an initial 50% interest and operatorship to Talisman. Talisman will then reimburse NGE for 75% of the direct costs of past expenditure—about $5 million—and fund an agreed seismic program up to a maximum of US$6 as well as comit to drilling, completing and testing a well up to a maximum of $15 million.
NGE will also have the option of progressively assigning up to an additional 20% interest in the permit based on the decisions over its funding share in the second and third option wells to a maximum of $15 million/well.
If NGE chooses to remain at 50% interest, Talisman will have the right to proceed with two additional wells by contributing 75% of the costs of the second and 65% of the costs of the third.
For PPL268, Talisman will assume an interest and operatorship of 15% by reimbursing NGE for 50% of past costs ($2.17 million) and funding an agreed seismic program up to a maximum of $5 million.
Talisman will be able to gain a further 35% by funding 80% of the costs of drilling, completing and testing a well. It can gain another 20% interest by funding 100% of two more wells.
NGE has decided not to farm out its third permit in the region (PPL267) and expects to drill a well on its Panakawa prospect before yearend.
Talisman’s interests in PNG also include ownership of Rift Oil, which also has permits in the western province and a farm-in to nearby permits held by Horizon Oil.