Arc Energy Acquires More Canning Basin Acreage
Arc Energy said that it has further consolidated its position in the Canning Basin of northwestern Australia with the acquisition of interests in an additional four blocks on the western side of the Basin. Two of the blocks are subsequent to successful work program bids and the other two of the blocks are via farmin to areas held by an Empire Oil led joint venture.
In relation to the bid blocks, the Company has been formally advised by the WA Department of Industry and Resources that Arc is the preferred applicant for blocks App 3/06-7 and App 4/06-7, subject to Native Title negotiations, and these will be awarded to Arc upon the successful completion of these negotiations.
The farmin to the other two blocks, EP 438 and EP 448, involves the acquisition of aeromagnetic data over the blocks as part of a wider survey to be acquired over Arcs SPA's in the east and north of the Canning Basin.
Arc will earn an initial 5 percent interest and the right to earn up to 75% interest in each permit by carrying out additional exploration up to an expenditure of A$3 million on each permit.
Arc has an aggressive drilling program currently underway in the Perth Basin and will mobilize Century Rig 18, which it has under long term contract, to the Canning Basin in late April to early May 2007, subject to weather conditions. Arc's Canning Basin exploration program will then commence with the Stokes Bay-1 well, located in onshore permit EP 104.
Commenting on the acquisitions, Arc Managing Director, Eric Streitberg, said:
"These deals further consolidate Arc's dominant position in the onshore Canning Basin, and are in line with the Company's strategy of acquiring acreage in all the prospective regions of the Basin prior to the commencement of the drilling program. The western part of the Basin has been very sparsely explored but significant oil and gas shows have been seen, particularly around the Admiral Bay Fault Zone where rich source rocks of the Caribuddy Formation have very significant oil and gas generation potential.
"We are now close to finalizing the acquisition of the areas we believe are relevant to our exploration program
and are now identifying and mapping some very large targets for our upcoming drilling program."
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