Meridian Petroleum announced an update on its Australian licenses.
In December 2007 the Company announced that it had signed Heads of Agreement to sell its Australian assets to Eaton Equity Partners (BVI) Limited, a company in which Tony Mason, former CEO of the Company, has an interest. In its Preliminary Results announcement of April 16, 2008, the Company announced that these discussions had expired.
The Company is committed to ensuring that its obligations under the terms of its licenses in South Australia are met, and in particular has focused on what is required for the PEL 82 license in the Otway Basin, which currently expires in May 2009.
The Company has therefore taken the following steps:
The PEL 82 license contains 3 attractive potential oil-bearing structures. Whilst highly prospective in nature, the reports available to the Company from independent and State geologists indicate the possibility of sizeable oil resources in each of these structures. The 2 key objectives of the seismic program will be to provide better quantification of this potential and identify optimum drilling locations. The Board also believes that the value of the PEL 82 license will be enhanced by the seismic program as it will provide potential partners with better information and will enable us to renew the license for a further 5 years.
The Company's licenses are of interest to other parties, and the Company recently received a further offer to purchase them. This offer was less attractive than the offer previously tabled and given the progress made by the Company and the significant increase in oil prices in recent months, the Board has rejected the offer as unattractive.
Whilst the Company's primary focus at present is on PEL 82, we are assessing options for our Arrowie Basin licenses and any opportunities to sell or farm-out these licenses will be progressed as they arise.
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