Bengal has signed an agreement to acquire a 100% working interest in a 654,000 acre exploration block in Australia's Cooper Basin. The acquisition is subject to the grant of an Authority To Prospect (ATP) by the government of the state of Queensland in Australia. The block has a 12-year term and has a minimum work commitment consisting of the acquisition of 100 line kilometers of 2D and the drilling of one well within the first four years.
The acquisition, which is being conducted through Bengal's wholly owned subsidiary Avery Resources (Australia) Pty Ltd, is based on the technical interpretation of 2,400 line kilometers of 2D seismic data on the block. Bengal's highly experienced technical team has identified several potential Jurassic age oil plays and deeper Permian age natural gas plays. The block is also influenced by a buried meteorite crater. Throughout the world, ancient impact structures have been known to source and trap significant hydrocarbon accumulations. A major gas transmission line crosses the block and a number of producing oil and gas fields are on trend and within 20 kilometers of the block's borders.
Bengal continues to build on its counter-cyclical approach to acquiring high potential exploration blocks. This latest acquisition brings Bengal's net undeveloped land to over 2.3 million acres. Upon closing this will be the fourth major exploration play acquired and announced by Bengal in the producing basins of Australia and India over the past year. In October 2009 Bengal was provisionally awarded a 100% working interest in a 340,000-acre offshore block at CY-OSN 2009/1 in the Cauvery Basin of India, where companies operating within 50 kilometers of the block have committed over $200 million of exploration expenditures over the next four years. In March 2009 Bengal was awarded a 100% working interest in exploration permit AC/P 47, an 861,000-acre block in Australian waters of the Timor Sea. A subsequent third party engineering Prospective Resource Assessment identified Best Estimate Gross Prospective Resources(1) of 590 million barrels of oil in one structure on the block. In December 2008 Bengal was awarded a 30% working interest in the 234,000-acre onshore India block at CY-ONN-2005/1 where it has partnered with two of India's National Oil Companies.
The acquisition fits Bengal's strategy of pursuing large land positions with operational control, minimal upfront capital requirements, high working interests and strong prospectivity. The acquisition is expected to close in the first quarter of calendar 2010.
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