Australian energy company WHL Energy Limited has informed that the final Seismic Volume Report for the “La Bella” 3D seismic survey has been received on schedule and provided to the VIC/P67 JV partners, AWE Limited (“AWE”) and Tap Oil Limited (“Tap”).
The fully processed Seismic Volume Report has been compiled by contractor CGG Services SA over the past seven months following the successful acquisition of the 928km2 “La Bella” 3D seismic survey in the VIC/P67 permit located in the offshore Otway Basin, Victoria in late 2013.
Under the terms of a farm-out agreement reached between WHL Energy and AWE the latter earned the ability to earn up to 60% equity in VIC/P67 by funding 75% of the cost of the “La Bella” 3D seismic survey up to a cost cap of US$9.0m.
Following review of the seismic data AWE has the right to surrender its interest in the permit or to commit to drilling two exploration wells at either 30% or 60% working interest.
If AWE elects to enter the drilling phase it will also assume Operatorship of VIC/P67. AWE now has 60 working days being until the 24 October 2014, to review the report and to elect to take up its option to become operator of the VIC/P67 permit. Under the terms of a separate farmout agreement executed with Tap, Tap has an option to acquire an initial 10% interest in VIC/P67 by paying up to a maximum of US$2.95 million of the “La Bella” 3D seismic survey costs.
Tap is not required to exercise the seismic option until 10 days after AWE confirms whether it wishes to elect to enter the drilling phase. In the event the seismic option is exercised, Tap has an option to acquire an additional 5% interest in VIC/P67 by paying a total of 20% of the cost of the first commitment well, capped at a gross well cost of US$35 million. Commenting on the receipt of the final Seismic Volume Report and its distribution to the VIC/P67 JV participants, WHL Energy Managing Director, David Rowbottam, said: “WHL is pleased to have received the final Seismic Volume Report on time and on budget and to have now handed that highly valuable and detailed information to AWE and Tap for their further assessment.”
“The Company looks forward to receiving responses from AWE and Tap to the information contained within that interpreted data and their decisions on taking up their options to commit to drilling in VIC/P67.”
“At this stage, due to confidentiality agreements and our desire to complete a full review in-house of the large amount of information contained in the report, we cannot comment on the report’s findings. However, I can say we are very pleased with the results we have seen initially and have already noted the survey has provided far greater data quality and clarity then previous seismic acquired over VIC/P67.”
“We look forward to providing further updates to the market as information becomes available.”