Drillsearch has agreed to sell its 2% Naccowlah Block Joint Venture interest and associated exploration permit ATP 259P and production licenses to Bounty O&G for $1.15 million comprised of $950,000 in cash and $200,000 in BUY common stock. The Naccowlah Block Joint Venture is owned by Santos (55.5%) as operator, Beach Energy (38.5%), IOR Energy (2%), Energy World (2%) and DLS (2%).
The sale is subject to completion of certain limited documentation conditions. BUY has paid DLS a non-refundable deposit of $105,000. The effective date of the purchase is April 1, 2010.
Managing Director Brad Lingo stated, "The sale of our small interest in the Naccowlah Block Joint Venture to Bounty Oil & Gas is win-win for both companies. For Drillsearch this enables us to focus our resources on our interest in the Tintaburra Block Joint Venture which is our core oil production asset. We believe the Tintaburra Block has significant opportunity for growth and expansion with renewed focus on the Eastern Margin Oil Fairway which underpins the Cooper Oil Program."
Mr. Lingo further stated, "The Naccowlah Block interest is a good asset but no longer fits Drillsearch’s growth focus on expanding the Tintaburra Block Joint Venture. Drillsearch and Santos have just completed the Tintaburra 207 km2 3D seismic survey targeting the recent Birkhead Formation success recognized with the Ipundu North-13 exploration and development well in the SW area of the Tintaburra Block. We see significant growth potential in the area and Drillsearch holds significant exploration acreage flanking the Tintaburra Block. We also see significant upside in the Tintaburra Block through the on-going facility rejuvenation program to return long-term inactive production wells to production. These type of opportunities simply weren’t as available or as significant to Drillsearch with only a 2% interest so we felt it best to focus our resources on the significant oil production and expansion potential in the Tintaburra Block."
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