Heritage Oil to Farm-In to PNG Licenses
Heritage Oil Plc announced that it has agreed with LNG Energy Ltd. to farm-in to two licenses onshore Papua New Guinea (PNG). On completion Heritage will be appointed the operator.
Heritage has agreed to acquire an 80 percent working interest in PPL 319 and PRL 13 from subsidiary companies of LNG Energy. In return for earning the working interests and operatorship Heritage will fund the costs of the seismic acquisition and the cost of drilling an exploration well. In addition Heritage will make a $4 million contribution to LNG Energy's back costs on the licenses.
The licenses are located onshore PNG at the junction of the Papuan fold belt and the Miocene carbonate platform where there are multiple producing fields and discoveries including the multi-TCF Triceratops and Elk/Antelope discoveries. The licenses are close to current and under-construction infrastructure with the Kutubu oil export pipeline and the PNG Liquefied Natural Gas pipeline crossing the acreage. The licenses also benefit from the Kikori River providing a link to the open sea thereby increasing transport options.
Assessment of the legacy dataset, which includes c.250 kilometers of 2D seismic data and high resolution magnetic and gravity surveys, has identified a potential local source kitchen with more than seven kilometers of section. This potential is being further evaluated through the recent acquisition of seismic data across the Tuyuwopi structure in PPL 319 which completed March 31. Heritage intends to enlarge this seismic program by funding a minimum of 62 miles (100 kilometers) of seismic data with the intention of progressing the Tuyuwopi structure to a drillable prospect in 2014 and to assess additional upside of the licenses.
Farm-in completion is expected within the short term, subject to customary conditions precedent including governmental approvals which the Company expects will be met.
Tony Buckingham, Chief Executive Officer, commented:
"We are delighted to announce the expansion and diversification of our exploration portfolio with this entry into Papua New Guinea. We look forward to developing and accelerating the work program as this acreage provides the opportunity to discover large gas deposits at a time when regional and global gas demand is increasing. We consider the region to be an attractive area both commercially and technically for supplying the premium East Asian gas markets."
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