The detailed specific terms of the transaction are commercially sensitive at this time but will generally involve Cooper Energy making an immediate payment for the back costs on the permit and a reasonable industry acceptable promoted participation on the future work program. The first well on the PSC is expected to cost between US$15-25 million (100% Joint Venture), depending on the prospect selected, the water depth at the prospect location, the day-rate on the rig selected to drill the prospect and the final well design.
This farm-in represents a material growth addition to Cooper Energy’s acreage portfolio and is consistent with Cooper Energy’s stated objective of growing in our focus areas of Australia, Indonesia and Tunisia.
The Hammamet PSC is currently 100% owned and operated by Storm Ventures International Inc. - a private Canadian oil and gas company. Storm operates three permits in Tunisia and will remain the Operator of the Hammamet PSC. During 2007 Storm acquired 402 km² of 3D and 240 km of 2D seismic over the exploration prospects and the Tazerka Field with a view to identifying the first target for drilling.
The Joint Venture is seeking to drill a well during 2008, subject to the timely conclusion of the technical studies and the availability of rigs in the region.
Cooper Energy has undertaken a detailed review of the available data in the block and, in addition to the abandoned Tazerka Oil Field, has identified several attractive and reasonable risk exploration prospects.
The Tazerka Oil Field central block, which was the focus of production from an FPSO during the 1990s, has an original oil in place estimate of 78 million barrels (P50) and produced 21 million barrels until the field was abandoned in 1998 in a low oil price environment. Seismic data indicates that there appears to be several blocks that lie adjacent to the Tazerka central block that may have the potential to also contain hydrocarbons. Further technical studies during 2007 and 2008 will mature the understanding of the exploration prospects and the Tazerka Oil Field. The objective of those studies will be to identify the location for the first well in the block.
The farm-in is subject to the approval of the Government of Tunisia. Both Storm and Cooper Energy have good ongoing relations with the Government of Tunisia through the efficient management of our respective blocks.
Cooper Energy remains the 100% owner and Operator of the Bargou Prospecting Permit. In 2007 Cooper Energy acquired 973 km of 2D seismic in the Bargou Permit and is currently preparing a detailed prospects and leads map that is expected to demonstrate the attractiveness of the Bargou Permit. This year Cooper Energy will initiate the application process to convert the Bargou Prospecting Permit into a five year Exploration Permit. During the five year Exploration Permit phase Cooper Energy will commit to shooting further seismic and drilling a well.
The combined Bargou and Hammamet work programs are expected to provide two high impact exploration wells in offshore Tunisia during 2008-2010.
Cooper Energy will make further ASX releases at appropriate junctures, the next release expected to be when the Government of Tunisia approves the farm-in.
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