MEO Australia Limited announced that its wholly owned subsidiary Rayong Offshore Exploration Limited has executed a binding farm-in agreement with Pearl Oil Offshore Limited (Pearl Oil) to acquire a 50 percent Participating Interest in the Block G2/48 Concession in the Gulf of Thailand.
G2/48 is located in shallow water, proximal to the Jasmine producing oil field and the Manora oil discovery currently under development.
Consideration for the farm-in comprises MEO reimbursing 50 percent of the costs of the 174 square miles (450 square kilometers) 3D seismic survey acquired in 4Q 2011, and paying 66.6 percent of the 2012 commitment well (capped at a gross well cost of $5 million, above which MEO will pay its participating interest). Pearl Oil will remain the Operator. The transaction is subject to the normal government approvals for transactions of this type.
In late 2011, Pearl Oil acquired approximately 174 square miles (450 square kilometers) of 3D seismic to mature one of the several oil prospects identified to the preferred concession commitment well. Drilling is currently scheduled to occur during 3Q-2012 subject to rig availability. Negotiations to secure a rig are advanced.
MEO's CEO and MD Jürgen Hendrich, commented on the announcement, "This farm-in is consistent with MEO's strategy of expanding our portfolio into South East Asia through a low cost entry approach targeting proven hydrocarbon systems with attractive targets.
"We have evaluated a number of opportunities in the Gulf of Thailand during the past 12 months and this opportunity represents a compelling entry into an emerging oil play fairway.
"The Thai fiscal terms makes even a modest sized commercial oil discovery very attractive to MEO shareholders.
"Our newly acquired interest is proximal to Pearl Oil's producing Jasmine oil field (>40 million barrels cumulative production since 2005) and Pearl Oil's Manora oil development (2009 discovery).
"At a corporate level, this transaction adds oil exploration exposure to the portfolio together with a third well to our 2012 drilling campaign which provides shareholders with a number of potential catalysts for value creation in the second half of this year.
"We look forward to working with Pearl and leveraging their regional technical and development expertise."
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