Drillsearch Energy Limited (Drillsearch) announced that it has entered into a series of binding transactions with Santos Limited (Santos) accelerating Western Cooper Wet Gas commercialization and expanding Drillsearch’s Cooper Basin oil Reserves and production.
Drillsearch believes the transactions with Santos deliver a material result for the Company and offers an attractive outcome for the shareholders of both companies and builds on the productive relationship that Drillsearch has developed with Santos over the past several years.
Wet Gas Transaction
Material Exploration and Field Development Work Commitments - Under this transaction, Santos will earn a 60 percent interest and Operatorship in the Western Cooper Wet Gas Project (PEL 106A and PEL 513) through the following:
• PEL 106A – funding a $68.3 million (AUD 75 million) firm work program of exploration, appraisal and field development works; and
• PEL 513 – funding a firm work program valued by Drillsearch at $41 million (AUD 45 million) covering all of the outstanding firm permit work commitments including acquiring 38.6 square miles (100 square kilometers) 3D seismic, drilling six firm commitment exploration wells plus one additional contingent exploration well
PEL 106A and PEL 513 contain conventional 2C wet gas resources of approximately 62 billion cubic feet (gross) over six discoveries, conventional wet gas prospective resources over 100 billion cubic feet (Best estimate) and additional unconventional gross prospective resources of over 7 trillion cubic feet (Best estimate).
In addition, Santos has agreed to provide further field development assistance for construction of surface production facilities to export production from PEL 106A and PEL 513. Drillsearch believes this assistance provides significant benefits to the Company and in so doing, mitigates the risk of having to secure additional funding for field development.
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