Dart Energy disclosed Tuesday that it has acquired New South Wales (NSW) Petroleum Exploration License (PEL 445) from Arrow Energy, a company owned by a 50:50 joint venture between Shell and PetroChina.
In a statement, Dart said that it will make a modest cash payment to Arrow Energy that takes into consideration the status of the license, the level of understanding of its resource potential and the fact that Dart is assuming all outstanding license obligations.
The agreement is conditional on approval for the transfer of the license by the NSW Department of Trade and Investment, Regional Infrastructure and Services.
PEL 445 is Arrow's only license in NSW and is non-core to Arrow's Queensland focus, where it has an established domestic gas supply business and is working to develop its proposed coal seam gas-liquefied natural gas (CSG-LNG) export project.
PEL 445 covers an area of approximately 2,741 square miles and is located in the Clarence Moreton Basin (CMB) adjacent to the border of NSW and Queensland, and to tenements held by Metgasco and ERM. The CMB represents an extension of the productive Surat Basin into northeast NSW. In Metgasco's CMB license areas, which are of similar size to PEL 445, 3P and 2P gas reserves of approximately 2,500PJand 400PJ respectively have been booked.
Based on the work undertaken in the CMB to date by Arrow Energy and others, the basin is considered to be highly prospective for CSG as well as other unconventional and conventional gas deposits. Since 2002, Arrow Energy has drilled 15 exploration wells. Exploration results indicate that the area contains significant gas resources, which are over-pressured, contain significant free gas, and are generally close to 100 percent saturation with a gas composition regularly over 95 percent methane.
Dart revealed that it intends to undertake a detailed assessment of further exploration activities required to gain a better understanding of the area's potential in accordance with work commitments to the NSW government.
Dart also noted that the area has the potential to make a very significant contribution to addressing the anticipated shortage of domestic natural gas on the East Coast of Australia in the coming years as long term gas supply contracts expire.
"I am delighted with this addition to Dart's NSW upstream gas portfolio. It adds further scale to our East Coast CSG business and reinforces our future positioning as one of the lowest marginal cost sources of gas available to meet tightening domestic gas markets. I look forward to further near term progress in this license area and working closely with both the broader community and the other operators in the Clarence Moreton Basin to bring the area's gas resources to market in a way that is both sustainable and co-operative and minimizes the impact on local communities," Dart's CEO Robbert de Weijer said in a statement.
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