Carnarvon Petroleum Limited has signed an agreement with Apache Northwest Pty Ltd which will secure extra cash for drilling activities on its North West Shelf permits, offshore Australia.
Apache will fund Carnarvon’s part of expenses for the Phoenix South-1 well and the Roc well up to an increased cap of US$70m.
Carnarvon retains its 20% interest in the wells, which are contained within WA-435-P and WA-437-P respectively.
Carnarvon and Finder Exploration Pty Ltd (Finder) will grant Apache an option to acquire a 40% interest in WA-436-P and WA-438-P (20% from Carnarvon and 20% from Finder), for a nominal consideration to be exercised on or before 3 July 2014. Upon exercising the option, Apache will assume operatorship of these permits and Carnarvon will hold a 30% interest in each of WA-436-P and WA-438-P.
Managing Director and Chief Executive Officer, Adrian Cook said, “This transaction, in conjunction with the recently completed Entitlement Offer, enables Carnarvon to be fully funded through the Phoenix South-1 and Roc wells and if Apache exercises the option, will secure a world class operator across these four contiguous permits.
In addition to drawing forward value to the more immediate Phoenix South-1 well and the contingent Roc well, the transaction creates the platform to commercialise the value of the Company’s North West Shelf acreage and create increased value for shareholders. In the event of success at Phoenix South-1 well, we anticipate this increase will be significant.”
Press Release, December 24, 2013