Tellus Resources Limited (TLU or the Company) revealed Wednesday a number of exciting developments concerning the PEL 105 license located in the heart of the Cooper Basin in South Australia. TLU presently has a 50 percent interest in the tenement with Senex Energy Limited (Senex) having the other 50 percent.
Firstly, the Company has recently been advised by the South Australian regulator (DMITRE) that it has converted the license into three PRLs (petroleum retention licenses), viz. PRL 108,109 and 110. This is very important to the JV (joint venture) partners as it gives them tenure over the area for up to 15 years. TLU has recently signed up to a Group Area Deed with Senex and the South Australian regulator which means that the PRLs fall under the umbrella of Senex’s extensive PRL portfolio. This allows for the spreading of costs over the entire Senex scheme area allowing the JV more flexibility and efficiency in meeting expenditure commitments and holding on to the acreage for the full term. This will allow more thorough investigation of the considerable potential of the PEL105 area into the future.
Secondly and following the terms of the Farmin Agreement between TLU and Senex (announced Sept. 11, 2013), Senex assumes operatorship from TLU.
Thirdly and as part of the Farmin Agreement noted above, Senex is required to free carry (with no dollar cap) TLU in a well to be commenced prior to June 30. Subsequent to this and following rig release, Senex will earn a further 20 percent in the PRLs leaving TLU at 30 percent and Senex 70 percent. The Companies had initially considered drilling Cassam 1, an oil exploration well. However following further work by Senex and a recent JV technical meeting, the following was agreed:
a. Senex will complete further work on a new and exciting conventional Toolachee play which is considered to be higher impact than Cassam 1
b. Senex will also further investigate a very exciting and potentially large gas play introduced by TLU and located adjacent to the very successful Bookabourdie gas field. The well would investigate an “off structure” play but one that could hold very significant amounts of condensate rich gas
c. As the work could yield significantly more upside for both companies than the Cassam 1 well, TLU has agreed to allow Senex more time to develop both plays and has agreed to drill in the third quarter of 2014.
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