Australia's Bounty Raises Oil Stakes in Surat Basin, Exits PL214 JV

Australia's junior oil explorer and producer Bounty Oil & Gas NL (Bounty) reported Wednesday that it has signed an agreement with two subsidiaries of the Bridgeport Energy Ltd. (Bridgeport) group for Bounty to acquire additional oil development interests in the Southern Surat Basin, East Queensland, Australia; to exit the PL 214 Utopia Joint Venture (PL 214); South West Queensland and to settle its ongoing dispute in connection with PL 214. This agreement formalizes the deal announced in the March Quarter report.

The material terms of the formal sale/purchase agreement are as follows:

• Payment of $291,679 (AUD 300,000) to Bounty
• Bounty will transfer its 40 percent PL 214 participating interest under the relevant joint operating agreement (JOA) to Oilwells Inc. of Kentucky (a Bridgeport subsidiary) and be released from claims under the JOA and all past or future liabilities. The estimated quantum of these claims and liabilities was $364,599 (AUD 500,000)
• Outstanding litigation to be discontinued with mutual releases
• Bridgeport (Surat Basin) Pty Ltd. will transfer all of its interests in the Alton Oilfield and Alton Block to Bounty with the result that Bounty will hold 100 percent of the Alton Oilfield
• Usual conditions and adjustments

As a result Bounty will be operator and hold a potential 353,000 barrels of 2P proven oil; production facilities at Alton and surrounding exploration acreage in Petroleum Lease 2 (PL2) located in the southern Surat Basin.

Details of the Alton interests are:

Alton Oil Field – PL2

• Bounty: 100 percent
• Development: 167,000 barrels of recoverable oil from the early Triassic age Basal Evergreen sand reservoir included with a potential 1.136 million barrels of 2P reserves located in the three sands of the Boxvale/Evergreen Formations

Eluanbrook – PL2

• Bounty: 100 percent
• Development: The estimated recoverable resource is 186.000 barrels of P50 OOIP (original oil-in-place) of 625,000 barrels
• Middle Triassic age Showgrounds Sandstone reservoir
• Up dip from proven 53 degree API gravity oil with associated gas

Other – ATP 745P

In addition, seismic surveys have indicated targets in the surrounding ATP 745P where Bounty holds 50 percent and is operator.

Commenting, Bounty CEP Philip Kelso said:

“Bounty has been negotiating for some considerable time to consolidate the Alton area. Alton Field produced 2 million barrels of oil following its discovery in 1964 and there is considerable potential for further reserve additions with undrilled locations and attic oil in the Evergreen Formation and possibly extensive oil in the lower Showgrounds Formation which has been proven as a high productivity sand in the area.

Once regulatory approvals are finalized; as a first step Bounty will work over 2-3 wells and commence production at Alton while it generates a full field development plan and plans to drill an up dip appraisal well at Eluanbrook in the northwest section of PL2.

Alton is 23 miles (37 kilometers) west of Brisbane and oil will be transported and sold into Brisbane Refinery.

We expect as operator to commence oil production at Alton in the next 6 months which is expected to exceed Bounty’s share of PL214 Utopia production but with very significant upside from three undrilled locations; enhanced recovery and later an appraisal well at Eluanbrook.”