Under the terms of this agreement Stuart, in its capacity as operator for the Gippsland Basin permit VIC P53, will drill the eighth well in the Consortium's sequence utilizing Seadrill's West Triton jackup.
The West Triton is presently being outfitted in Singapore. It is expected to arrive in Victorian waters in February 2008 and expects to spud its first well in VIC P53, Bazzard 1, in September 2008.
Stuart will sole-fund the cost of Bazzard 1 to earn a 50% participating interest in any discovery area. Stuart is entitled to earn 50% in the whole of the VIC P53 permit by sole-funding a second well.
After drilling operations have been completed at Bazzard 1, participating interests in any discovery will be Stuart Petroleum with 50%; Cue Petroleum with 25%; Exoil Limited with 16.667% and Moby Oil & Gas with 8.333%.
Stuart's Managing Director, Tino Guglielmo, said "Detailed study of 2007 3D seismic data has revealed VIC P53 to be an extremely promising permit area. Stuart believes that its planned high-impact well, Bazzard 1, will test a structure with potential to contain 50 million barrels of oil (mean unrisked reserves)."
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