Deal prompts gas exploration offshore Victoria

dealA farm-in agreement signed in early September will see AWE Limited acquire a 60 per cent working interest in an offshore Victorian permit from WHL Energy.
The Vic/P67 permit contains the undeveloped La Bella gas discovery along with several near-field exploration targets, and is adjacent to the producing Casino gas project in Vic/P44 in which AWE has a 25 per cent interest.
“The La Bella gas and condensate field is located close to existing infrastructure which significantly enhances its development potential,” AWE managing director Bruce Clement said.
“Gas prices in South-East Australia are expected to rise [in] coming years, making the economic case attractive.”
WHL Energy previously reported gross 2C Contingent Resources for La Bella gas of 114 petajoules of gas, with additional exploration prospects within the permit area holding total unrisked prospective resources of 577PJ on a P50 basis.
As part of the deal AWE will pay 75 per cent of the costs for a 3D marine seismic survey of the La Bella field and surrounding exploration targets, capped at US$9 million. WHL had previously received environmental approval for the 811 square kilometre survey and it was expected to begin in the December quarter.
Following review of the seismic data, AWE would have the right to either surrender its interest in the permit or commit to drilling two exploration wells at either 30 per cent or 60 per cent working interest. If AWE chose to enter the drilling phase, it would assume operatorship of Vic/P67 in the first half of calendar year 2014.
The transfer of interest to AWE would be subject to normal regulatory approvals.