Mobilization of the Hunt Energy Services Rig #3, which has been contracted to undertake the drilling of two new wells in the field, is underway.
The new wells, Utopia-5 and Utopia-6, are situated between existing producing wells and are expected to each contribute up to an additional 50 BOPD to field production.
Proposed Total Depth for Utopia-5 is approximately 1075 meters, with the well planned as a producer from sandstones in the Murta Formation reservoir.
Utopia-6 will commence immediately after and will drill to a proposed Total Depth of approximately 1400 meters. While it is also planned as a Murta producer, the well will test deeper exploration targets including the Hutton Sandstone – an established high-quality reservoir sandstone in the region (flow rates in excess of 2000 BOPD have been encountered from the Hutton Sandstone in the nearby Tarbat-Ipundu Oil Field).
Bounty also advises that it has reached an agreement with Arc Energy (ARC) whereby Bounty will sell its 7.5% interest in Offshore Perth Basin permits WA-325-P and WA-327-P to Arc for A$1 million cash. An additional amount of up to $2 million will also be payable to Bounty on certain "success" thresholds being met following the drilling of the next two exploration wells in those permits. The thresholds are based on a subsequent commencement of appraisal drilling, the declaration of commerciality and the commencement of production.
The completion of the sale is subject to Joint Venture and statutory approvals.
Bounty Managing Director, Laurence Roe, stated that this deal allows Bounty to further focus on its producing assets.
"This is an exciting time for the company," he said. "We are about to commence infill drilling in our Utopia Oil field – if these wells are successful, and we have every reason to expect they will be - then not only will they improve the field's cashflow and generate more revenue for Bounty, but the Joint Venture will be actively contemplating further development work in the near future.
"We are keen to optimize our producing asset and to do it expeditiously – with oil prices now at unprecedented levels, we recognize the value in converting reserves "in the ground" into cashflow.
"While we take very seriously the disposal of any asset, the sale of our interests in the Perth Basin provides Bounty with an opportunity to monetize an exploration asset and to potentially underpin further work in Utopia. The deal with Arc is also structured to ensure that in the event of success in the next Perth Basin drilling program, Bounty will also enjoy a material benefit."
Partners in the Utopia Oil Field are:
Partners in WA-325-P and WA-327-P are:
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