Completion of all agreements between Cue Energy and BP, Beach Energy, and New Zealand Oil & Gas has been achieved, resulting in the formation of a joint venture to drill the Ironbark-1 well in exploration permit WA-359-P, offshore Western Australia. The well is scheduled to be drilled in late 2020.
Back in May, Australian National Offshore Petroleum Titles Administrator (NOPTA) gave its approval for the title transfers of exploration permit WA-359-P to new joint venture partners BP, Beach Energy, and New Zealand Oil & Gas.
According to Cue’s statement on Friday, the agreements which have been finalized are the BP option deed announced in October 2016, farm-in agreements with Beach and New Zealand Oil & Gas announced in November 2017 and October 2018, and the coordination agreement between all parties announced in October 2018.
Under these agreements, Cue has received approximately A$1.8 million and will now be funded by BP, Beach and New Zealand Oil & Gas for approximately US$11 million of Ironbark well costs. A further US$8 million of cash reserves has been escrowed by Cue to fund the uncarried portion of its expected participating interest cost for the well.
The WA-359-P Joint Venture participating interests are now: BP (operator) 42.5%; Cue 21.5%; Beach 21%; New Zealand Oil & Gas 15%.
Cue CEO Matthew Boyall says the completion of these agreements is a great achievement for Cue, with a significant equity position maintained in a fully funded, high impact well.
“BP, Beach and New Zealand Oil & Gas are technically strong, well funded partners and Cue is very excited to be working together in this joint venture to drill a well in the Ironbark prospect. As previously announced, the Ocean Apex rig has been contracted and drilling is scheduled for late 2020.”
“Cue holds a significant, 21.5% participating interest in the world class Ironbark prospect, which has a best estimate 15 Tcf of prospective recoverable gas and is close to existing LNG infrastructure. If successful, Ironbark has the potential to be company changing for Cue,” Boyall said.
Exploration permit WA-359-P is located in the Carnarvon Basin, offshore Western Australia, approximately 50km from the North West Shelf LNG infrastructure. The Ironbark-1 well is expected to drill to 5500 meters and will be the first test of the Ironbark prospect.
An Environment Plan for the Ironbark-1 well site survey activities has been accepted by Australian regulator NOPSEMA, with survey operations expected to be undertaken in 3Q 2019.
This activity is a pre-drilling site survey and aims to confirm that a future well location is positioned on flat seabed, in an area free of seabed debris and shallow gas pockets. This is a small scale geotechnical and geophysical site survey.
One vessel will be used for geophysical acquisition (multibeam, side-scan sonar, sub-bottom profiler, magnetometer, high resolution reflection imaging) and geotechnical sampling (piston or gravity coring and box core sampling). The duration of the activity is between seven and ten days at a water depth of between 200m-300m. The activity will occur in a 4km by 4km area plus 2-kilometer buffer for vessel maneuvering.
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