Australian oil and gas company Cue Energy has received a one-year extension and suspension for future work on the WA-359-P permit offshore Australia, which contains the Ironbark gas prospect.
Cue said on Thursday the extension was for one year, with an expiration date of the permit set on April 25, 2019.
The company also received a 12-month suspension for Year 3, 4, and 5 work program commitments and a Year 4 work commitment variation on WA-359-P.
“The suspension and extension will allow time for detailed well planning using newly available data and preparing for drilling the Ironbark-1 well, targeted for 2019,” Cue added.
As for the Ironbark prospect, it is a giant Mungaroo Formation prospect that is mapped with an area of up to 400 square kilometers and a best technical estimate of 15 trillion cubic feet (Tcf) of prospective recoverable gas resource based on an internal assessment performed by Cue. The prospect is less than 50 kilometers from the North Rankin platform (North West Shelf LNG) and near Pluto and Wheatstone LNG infrastructure, providing cost-effective commercialization options.
BP and Beach Energy equity sale
Cue currently holds 100% equity in WA-359-P and has executed agreements with BP and Beach Energy which provide them opportunities to acquire 42.5% and 21% equity respectively in the permit.
While BP evaluates exercising its 42.5% option, which is a condition to the Beach agreement, Cue would continue considering options for the remainder of the funding of the Ironbark-1 well, representing 25% of the estimated well cost if BP exercises its option and the Beach agreement completes.
To remind, Cue extended BP’s right to exercise its option to acquire a stake in the permit by six months back in mid-April. The extension awarded to the British oil major will expire on October 25, 2018.