Subject to confirmation of rig availability the Champion-1 exploration well is planned to be drilled in November 2004 to a total depth of approximately 2,050 meters to test the Champion Prospect, a seismically defined anticlinal structure interpreted to have the potential to contain up to 27 million barrels of recoverable oil, if oil is present.
The Champion Prospect is situated 12 kilometers south of the up to 21 billion cubic feet Rivoli Gas Field, with its 11 meter gas column within the Birdrong Sandstone, the reservoir target for the Champion-1 well. The target Birdrong Sandstone in Champion-1 is expected to be drilled at a depth of 1,950 meters. The Birdrong Sandstone is a prolific oil producer in the Carnarvon Basin.
Under the terms of the farmin agreement between Strike Oil and Victoria, Victoria will have a 10% free carried interest through the drilling of Champion-1 to a total well cost capped at A$3 million and in the event of the parties agreeing to test a hydrocarbon discovery, the testing of Champion-1 to a total additional cost capped at A$2 million.
The 40% interest being earned by Strike Oil in EP 325 is subject to completion of the Champion-1 drilling and testing farmin work program and subject to the normal Joint Venture and Government approvals.
Strike Oil will also take over the role of operator for the drilling of Champion-1 and ongoing exploration in the permit.
Mr. John Kopcheff, Managing Director of Victoria Petroleum NL commented that "Victoria Petroleum NL welcomes Strike Oil into the permit, the second company to join with Victoria Petroleum NL and Sun Resources NL in the planned November 2004 drilling of the Champion-1 well in EP 325".
"Victoria Petroleum also welcomes the experience that Strike Oil as a successful offshore operator, most recently with the offshore Otway Basin, Casino gas discovery, will bring to the permit".
"The presence of the Rivoli Gas Field discovery in the Permit provides favorable evidence for the potential presence of gas and oil within other prospects within the permit such as the Champion Prospect".
"Victoria Petroleum NL considers the Champion Prospect to be a robust structure and one of the few remaining undrilled four way dip closed structures in the Carnarvon Basin which is close into shore and in shallow water depths."
"The Champion Prospect has long been considered by Victoria Petroleum to have significant oil bearing potential".
Following this agreement with Strike Oil NL, interests in the Champion Prospect and EP 325 including the Rivoli Gas Field are:
Strike Oil N.L. 40%
Victoria Petroleum N.L. 35%
Black Rock Oil & Gas PLC 15%
Sun Resources N.L. 10%
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