Oil Basins and Green Rock Energy, partners of the Backreef Area Joint Venture, have contracted a rig to drill the East Blina-1 exploration well in the onshore Canning Basin of Western Australia, a spokesperson told Rigzone on Thursday. The well targets up to 3.1 million barrels of in-place oil.
The joint venture has inked a letter of intent (LOI) for the Dynamic Drilling Rig 17 to drill East Blina-1 to a target depth of 3,609 feet (1,100 meters) as well as an option for a second well.
East Blina-1 is expected to spud in early October 2012 and will be completed ahead of the deadline for the Backreef Area farm-in commitment well by October 31, 2012, that Green Rock had agreed to.
Oil Basins said in a statement on Tuesday that East Blina-1 will take around ten days to drill. "But it is entirely possible that drilling works can be completed as fast as within seven days," the spokesperson added.
The LOI and the subsequent drilling contract are subject to the drilling rig being cleared for use in Western Australia by the Department of Mines and Petroleum (DMP). In addition, the DMP and relevant stakeholders have to approve site clearances. "We expect the whole approval process to take around 30-45 days," the spokesperson said.
Green Rock has the option to take a 5-percent interest in the Backreef Area by paying an additional $656,750 (AUD625,000) or a 20-percent stake by paying $2.6 million (AUD2.5 million) for future operations pertaining to East Blina-1. Oil Basins will retain 80-percent of the Backreef Area and 100-percent of any benefits from a potential Buru Energy back-in.
Oil Basins and Green Rock Energy are both listed on the Australian Securities Exchange.
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