Talon Petroleum Farms in to the Walyering Gas Field in Australia
ASX-listed Strike Energy Ltd. has entered into an agreement with Talon Petroleum Ltd. to farm out a 45% non-operated interest in exploration permit EP 447 containing the Walyering gas field located in Australia’s Perth basin. Strike will retain a 55% operated interest in the permit.
Under the terms of the agreement, the companies will form an unincorporated joint venture to appraise and develop the field. Talon will earn its 45% interest in EP 447 by carrying Strike for the first A$6.0 million of expenditure (out of a proposed gross cost of A$9.0 million) to be incurred by the joint venture. The initial work programme includes the drilling and completion of one appraisal well, along with geological and geophysical studies. Talon will also pay Strike A$1.0 million as security for its free carry obligations.
EP 447 covers an area of approximately 1,108 sq. km located onshore in the Perth basin. The permit targets the Jurassic Wet Gas Play in the Cattamarra sequence, and is estimated to have mean prospective resources of 7.431 million barrels of oil equivalent (MMboe).
ASX-listed Talon had been focused on acquiring non-operated interests in the UK North Sea till date. Adelaide-based Strike currently holds interests in the Perth and Cooper basins, with a primary operational focus on a significant gas discovery at West Erregulla in the Perth basin.
The transaction is in line with Strike’s strategy of accelerating production of large volumes of domestic gas from its Perth basin portfolio in order to capture additional market share during a period of expected supply shortage. The joint venture will allow Strike to explore potential development opportunities and offset associated expenditure through an appraisal program that includes the drilling of five proposed well locations in the Walyering gas field.
“The acceleration of the Walyering appraisal will add to what is a very exciting coming 12 months for the company. This includes the West Erregulla wells, the targeted Phase 1 FID and now the potential to have a second gas resource progressing into development,” said Stuart Nicholls, Strike’s Managing Director & CEO.
“Whilst the Greater Erregulla development remains the company’s primary focus, Strike is making the most of this current low-cost environment. Walyering is a perfect example of the value that can be generated through offsetting costs from an operationally concentrated portfolio with geological diversification,” he added.
The completion of the transaction is subject to ministerial approval and the execution of definitive transaction documentation.