AET Farms in to Pilot Energy's Perth Basin Exploration Permits
Privately-held energy company Advanced Energy Transition Pty Ltd. (AET) has entered into a farm-in term sheet with ASX-listed Pilot Energy Ltd. to farm in to EP 416 and EP 480 (containing the Leschenault gas prospect) located onshore in the Perth basin in Western Australia. In exchange for a 50% interest in each exploration permit, AET will fully fund the drilling of one exploration well in the Leschenault gas prospect (Leschenault well) within the area of either of the permits.
Under the terms of the deal, Pilot Energy has agreed that upon the execution of definitive binding agreements for the farm-in, the company will issue to AET (or its nominee) 2.5 million 3-year options with an exercise price of A$0.10 per share if the binding farm-in agreements are entered into prior to the recommencement of trading of the company on ASX, or 150% of the 5-day VWAP, if the legally binding farm in agreements are entered into after the reinstatement of securities in the company on ASX.
EPs 416 and 480 cover a combined area of approximately 1,589 sq. km, and target the Permian and Triassic Lesueur sandstones. The permits contain the Leschenault prospect, which has two structural culminations, either of which can be a potential drilling location for a vertical well to test the conventional reservoir targets.
The permits cover and incorporate the area under assessment for the development of the South West CO2 Geosequestration Hub project (the South West Hub), a government-industry partnership led by the Western Australian Department of Mines, Industry Regulation & Safety (DMIRS). The South West Hub is Western Australia’s first onshore Carbon Capture and Storage (CCS) trial project.
Work plans for the permits include drilling of the Leschenault well, within 12 months of the definitive farm in agreements, and to confirm that the key carbon sequestration reservoirs focused on as part of the South West Hub CCS project are also present in the Leschenault well and suitable for carbon sequestration as part of the overall project.
“The transaction with AET is absolutely aligned with Pilot’s business plan of leveraging off its existing oil & gas assets and diversifying into new competitive energy production streams. The development of carbon capture and storage at our existing gas permits complements the expansion of our footprint in the South West Western Australia energy market and can form the core of a significant blue hydrogen and CCS project for South West Western Australia,” commented Brad Lingo, Executive Chairman of Pilot Energy.
Sydney-headquartered Pilot Energy Ltd. currently holds interests in various onshore and offshore exploration permits in the Perth basin. Based in Nedlands, Western Australia, AET is focused on energy transition, and is currently mobilizing a shallow water jack-up (SWJU) to Australia with advanced drilling capabilities to supports its clients in various areas.
The transaction is subject to certain approvals, land access, and finalising of the legally binding transaction agreements between the parties, which is to be concluded by August 15th.