Drillsearch Energy to Takover Ambassador Oil and Gas
Drillsearch entered the northern area of the Cooper Basin in 2013 through its acquisition of Acer Energy Limited. Following completion of the takeover, Drillsearch acquired the 159.4 square mile (413 square kilometer) Coolibah 3D seismic survey over PEL 101 and adjacent areas of PEL 570 and PEL 182. There are three existing wet gas discoveries in PEL 101, plus the Vanessa wet gas discovery located in permit PEL 182 immediately to the west.
The Coolibah 3D seismic survey was designed to high-grade the existing discoveries in advance of a comprehensive appraisal and development drilling program. The survey identified significant additional prospectivity in the area for liquids-rich conventional gas in combined structural and stratigraphic traps, and confirmed the presence of potentially prospective Toolachee Formation channels extending across PEL 101 and PEL 570. In FY2015, Drillsearch plans to commence a two-year appraisal and development campaign in PEL 101 to further de-risk the conventional prospectivity of the permit, which has the potential to generate significant value across the combined seismic area.
Drillsearch considers that the broader Northern Cooper Wet Gas project area is analogous to Drillsearch’s Western Cooper Wet Gas project area and to the Greater Tindilpie complex in the southern Patchawarra Trough which is under development by the Santos-operated South Australian Cooper Basin Joint Venture. The Greater Tindilpie complex has generated significant gas reserves in the Patchawarra Trough and demonstrated substantial tight sands potential throughout the Permian section, the same zones being appraised by Drillsearch in PEL 101.
Fully Carried Work Program
In PEL 570 Ambassador is fully carried by New Standard Energy (New Standard) for a $39.3 million (AUD 42.5 million) exploration program. The program specifically targets the permit’s unconventional resource potential in the tight sands and shale in the Permian section of the Patchawarra Trough. This program is to be operated by New Standard Energy, with technical support from experienced US unconventional E&P company Magnum Hunter Resources which has also taken a 17 percent interest in New Standard. The carry will give Drillsearch shareholders exposure to the unconventional potential of the liquids-rich, lower temperature, stress, and CO2 (carbon dioxide) play areas of the Patchawarra Trough for no capital outlay throughout the carry period.
By offering Drillsearch shares in exchange for Ambassador shares, Ambassador shareholders retain exposure to the upside potential of Ambassador’s assets and also gain exposure to the following:
- A profitable mid-tier ASX oil and gas company focused on growing reserves, production and cash flow
- Record production anticipated to be at the higher end of a range of 3.0 to 3.3 million barrels in FY2014
- A balanced portfolio focused solely on the Cooper Basin that includes:
- Exposure to a prolific Oil Business on the Western Flank
- A Wet Gas Business pursuing commercialisation of a number of existing discoveries in the Western and Northern Cooper areas
- An active Unconventional exploration program focused on ATP 940P in the Nappamerri Trough
Commenting on the Offer, David Shaw, the chairman of Ambassador, said:
"The Offer represents a compelling opportunity for all Ambassador shareholders to capture a premium for their shareholding, retain exposure to Ambassador’s key asset, and to become part of a profitable mid-tier oil and gas producer. The Directors have unanimously resolved to recommend that shareholders accept the Offer, in the absence of a superior proposal."
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