Cooper Energy has advised shareholders and investors that the PEL110 exploration permit in the Cooper Basin has been renewed for a second 5 year term. The second term has a commitment of one well in the third year that must be drilled if the third year is entered. Wells in this region cost typically from A$1.5-2.0 million (100% Joint Venture).
Cooper Energy Limited and Magellan Petroleum (Southern) Pty Ltd have elected to continue into the second term. Beach Petroleum has elected to exit from the permit due to PEL110 being non-core to their growth aspirations.
Once Beach's withdrawal has been formalized, Magellan’s equity will increase from 35% to 60% and Cooper’s equity will increase from 25% to 40%. Magellan and Cooper have agreed that Magellan will be appointed the Operator of the permit.
PEL110 is located in the north of the Cooper Basin, between the Keleary and Telopea oil fields to the south and the James oil discovery to the north.
The PEL110 Joint Venture has identified 7 leads and prospects that have individual P50 undiscovered recoverable oil estimates ranging from 0.6 to 3.8 million barrels at the Birkhead/Hutton formation level. The highest graded target is the ready to drill Bales Prospect, which has a P50 undiscovered recoverable oil estimate of 1.5 million barrels and a 35% chance of success.
The Bales prospect is favoured due to its location on a structural nose, which is thought to be a focus for oil migration. All the prospects have the potential to discover oil in multiple reservoirs within the Birkhead/Hutton, Tinchoo and Poolowanna formations, which would increase the recoverable oil volumes should more than one formation yield a discovery.
Due to the relatively high equity levels currently held by Cooper and Magellan, it is expected that the Joint Venture will mature a number of prospects to drill-ready status and then seek further Joint Venture Partners to participate in the low cost exploration drilling.
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