Mitsubishi farms into onshore Canning basin
Japan’s Mitsubishi Corp. has formed a strategic partnership with Buru Energy Ltd., Perth, to jointly explore and develop the Canning basin in the Kimberley region of northwest Western Australia.
MELBOURNE, June 15 -- Japan’s Mitsubishi Corp. has formed a strategic partnership with Buru Energy Ltd., Perth, to jointly explore and develop the Canning basin in the Kimberley region of northwest Western Australia.
Mitsubishi has farmed into Buru’s exploration permits in the region by promising to spend as much as $102.4 million (Aus.) on Buru’s forward exploration costs.
The company will spend as much as $62.4 million (Aus.) on conventional exploration and $40 million (Aus.) on unconventional programs, including shale gas prospects.
Mitsubishi may also carry as much as $50 million (Aus.) of Buru’s development costs for major oil and gas production infrastructure.
As part of the deal Mitsubishi has the right to earn a 40% interest in Buru’s permits by funding 80% of the 2010 program up to a maximum of $22.4 million (Aus.) and an additional 10% interest by funding next year’s exploration effort.
If Mitsubishi elects not to continue into the 2011 program then it will forfeit any interests earned during the 2010 program.
Mitsubishi also has the right to earn 50% interest in Buru’s production permits in exchange for an additional cash payment at a price to be determined by an independent expert based on proved and probable reserves.
Buru will remain operator in all permits, but Mitsubishi will lead any LNG commercialization plans.
Buru’s Executive Director Eric Streitberg says the company and Mitsubishi have a shared vision for what he calls the Canning “superbasin” as a major supplier of energy to Australia and the region. He added that the new strategic partnership will enable the two companies to realize that vision.
The 2010 exploration program will include two wildcat wells, a reentry and refracing of a gas discovery (Yulleroo) and an appraisal of the Pictor oil and gas discovery.