Meridian Petroleum has signed a contract with Terrex to acquire 88 square km of 3D seismic on its 100% owned PEL 82 license in the Otway Basin, onshore South Australia.
The survey is expected to commence early in 2009 and is estimated to cost some US $2.5 million.
RPS Energy, the independent petroleum consultant, has conducted a review of the information available on PEL 82. The key points from this review are as follows:
These estimates are highly prospective, with RPS currently risking the prospects as a 1 in 5 chance of success (COS), but the Board believes that the research undertaken to date indicates a significant opportunity for the Company and its shareholders, and justifies this investment in the 3D seismic survey. The survey will provide further high-quality information on these three structures, better guidance on possible drilling locations and potentially could improve the COS to 1 in 3. The Board is also encouraged by the work done on the Otway Basin area by the South Australian Government geologists and the decision to auction additional licenses in the area in November 2008.
Following the analysis of the 3D seismic data the Board will consider the next steps which may include bringing a partner into the licence. The license is currently being held in suspension and expires in August 2009 at which time the Company intends to renew the license for a further period of up to 5 years. As part of that process, Meridian expects to commit to drill a well on PEL 82 during the first year of renewal.
Stephen Gutteridge, Chairman of Meridian Petroleum, said, "On May 29, 2008, we reported that we had received a further offer to purchase our Australian licenses. With the Company performing strongly at the time, the Board decided to reject this offer, which was for several million dollars, and to proceed with the development of the licenses for the benefit of our shareholders. A key factor in that decision was the significant potential in the PEL 82 license and the signing of this seismic contract with Terrex is a key milestone in the unlocking of that potential.
"We remain very excited by this prospect and are looking forward to the results from the survey early in 2009."
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