AWE to Acquire 60% Stake in Permit Vic/P67 off Victoria, Australia

Australia's AWE Limited announced Wednesday that it has signed a farm-in agreement to acquire a 60 percent working interest in permit Vic/P67, offshore Victoria, Australia from WHL Energy Limited.

The Vic/P67 permit contains the undeveloped La Bella gas discovery and multiple near-field exploration targets. The permit is adjacent to Vic/P44 in which AWE holds a 25 percent interest in the producing Casino gas project.

Under the terms of the farm-in agreement, AWE will pay 75 percent of the total cost, capped at $9 million, to acquire a state-of-the-art 3D marine seismic survey over the La Bella field and surrounding exploration targets. The 313 square miles (811 square kilometers) seismic survey has full environmental approvals and is expected to commence in the fourth quarter of calendar year 2013.

Following review of the new seismic data, AWE has the right to surrender its interest in the permit or to commit to drilling two exploration wells at either 30 percent or 60 percent working interest. If AWE elects to enter the drilling phase, AWE will assume Operatorship of Vic/P67 in the first half of calendar year 2014.

The transfer of interest to AWE will be subject to normal regulatory approvals.

Managing Director, Bruce Clement, said that farming-in to the La Bella field was in line with AWE’s strategy of identifying early stage appraisal opportunities where the company can add value.

“The La Bella gas and condensate field is located close to existing infrastructure which significantly enhances its development potential.

“Gas prices in South-East Australia are expected to rise over coming years, making the economic case attractive,” Clement said.

WHL Energy has previously reported gross 2C Contingent Resources for the La Bella gas and condensate discovery of 114 Petajoules (PJ) of gas and additional exploration prospects within the permit area with total unrisked Prospective Resources of 577 PJ on a P50 basis.

The planned 3D seismic survey will further refine the mapping of the La Bella field and the surrounding prospects, along with development drilling targets.

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