MEO Australia Ltd. announced Tuesday that it has executed an agreement with Rouge Rock Pty Ltd. granting the latter an option to acquire a 45 percent interest in the AC/P50 and AC/P51 Exploration Permits in the Vulcan sub-basin off the north west coast of Australia.
Under the option, Rouge Rock will carry out and fund the remaining work program for each permit consisting of seismic reprocessing and other technical activities, which must be completed in stages in the work programs that end May 18, 2018. When the reprocessing work is completed, Rouge Rock may exercise its option by notifying MEO prior to May 18, 2018.
Both permits, located adjacent to a number of oil and gas discoveries, are currently 100 percent owned by MEO. The Ramble On and Jur’maker oil prospects have been identified in a proven petroleum system defined on modern 3D seismic data in a shallow water area suitable for drilling via a lower cost jackup. The Permits were renewed in 2015 for 5 year term with a minimum work program of studies and seismic reprocessing in the first 3 years.
The reprocessing work, covering 3D broadband reprocessing, merging of the Zeppelin and Onnia 3D seismic data, and interpretation and mapping of the reprocessed seismic data, costs approximately $860,000 (AUD 1.15 million). Rouge Rock is expected to undertake additional technical work, including full wave form inversion of the Zeppelin and Onnia 3D seismic data and pre stack depth migration of the merged seismic data sets.
If Rouge Rock exercises its option and acquires an interest in both permits, the firm and MEO intend to undertake a joint farmout process during 2017 based on the results of the reprocessing work.
"MEO has actively sought to bring in an additional partner for AC/P50 and AC/P51 to minimize the Company’s exposure to exploration costs while at the same time advancing the prospectivity of these permits. The agreement with Rouge Rock will enable substantial value-adding work to be undertaken on the permits while at the same time reducing MEO’s near term expenditure and allowing the Company to strategically focus its capital on lower cost onshore projects such as the Block 9 Production Sharing Contract in Cuba," MEO Managing Director & CEO Peter Stickland said in the press release.
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