Octanex N.L. has announced that the Joint Venture exploring the two Exmouth Plateau permits, WA-362-P and WA-363-P, has been granted renewals of both permits.
The initial 6-year terms of the two permits expired on 21 December 2011 and the Joint Venture (comprising Octanex and Eni Australia Limited (Eni)) applied to renew both permits for their first 5-year terms. Renewal of the permits was granted on 23 August 2012. A regulatory requirement for the grant of the renewed terms is that half of the original area of each permit be relinquished.
Octanex, together with its wholly-owned subsidiaries Strata Resources Pty Ltd and Exmouth Exploration Pty Ltd, hold an aggregate 33.333% participating interest in the renewed permits, with Eni holding the remaining 66.667% interest.
The work programme terms of the renewals are the same for both of WA-362-P and WA-363- P and include geotechnical studies and seabed coring in the first 3 years, acquisition of 500 km2 of new 3D seismic data in year 4 and an exploration well in year 5.
The Joint Venture is required to complete the work programmes for the first 3 years of the renewed permits. After the work programmes for the first 3 years have been completed, Octanex and Eni are individually able to withdraw from either or both of the permits prior to the commencement of year 4 or year 5.
Under the terms of its contractual arrangements with Eni that affect the operations of WA-362- P and WA-363-P, Octanex is not required to make any financial contribution to the costs of exploring each permit until a well is drilled and tested in that permit, or Eni withdraws from the permit (whichever occurs earlier).
Eni can drill a well in either or both of WA-362-P and WA-363-P at any time during the renewed terms (or during a second renewed term) in order to fulfil its contractual arrangements in relation to that permit. Should Eni decide to drill a well in either of WA-362-P and WA-363-P, Octanex’s aggregate interest in that permit will reduce to 20% and Eni’s interest will increase to 80%.
Octanex is looking forward to working with Eni to further explore WA-362-P and WA-363-P in order to build on the programmes completed by Eni and OMV Australia Pty Ltd during the initial terms of the permits. The work completed during the initial terms of WA-362-P and WA- 363-P saw significant amounts of new 2D and 3D seismic data acquired and a well drilled in each permit. While the Gawain-1 well in WA-362-P and the Galahad-1 well in WA-363-P were not discoveries, they advanced the data base of exploration information that will be added to during the renewed terms of the permits.
Press Release, August 24, 2012