Santos Farms in to Part of ATP 934 (Barrolka Permit) in Queensland
ASX-listed Santos Ltd. has entered into a farm-in agreement with Calgary-based Bengal Energy Ltd. to earn a 60% interest in a portion of exploration tenement ATP 934 (Barrolka Permit) located in south-western Queensland. The remainder of the ATP 934 exploration and development portfolio is not part of the farm-in agreement.
Under the agreement, Santos QNT Pty Ltd., a wholly-owned subsidiary of Santos, will have the right to earn a share in approximately 420 sq. km in the southern portion of ATP 934, offsetting recent successful Santos-operated exploration wells. In exchange, Santos will pay 100% of the cost of a one-well work program with an estimated gross cost of A$2.7 million. Drilling is expected to commence in the second half of 2021, subject to surface access and rig availability. Upon completion of the deal, Santos will act as the operator of the farm-in lands.
ATP 934 covers an area of approximately 1,729 sq. km (427,000 acres) in the Barrolka Gas Play of the Cooper-Eromanga basin. The permit is surrounded by producing gas fields and gas pipelines that feed eastern Australia, and is believed to hold significant gas resources with five possible prospects/leads, based on 2D seismic interpretation. Bengal Energy has identified four wells to be tested and re-completed for production in the first phase of development.
“Bengal Energy intends to continue its own exploration campaign on the remaining area having successfully commuted its commitments into the next term of ATP 934 through a special amendment approved by the regulators,” the company said in a statement.
In September last year, TSX-listed Bengal Energy acquired four additional permits and a 26 km pipeline in the Cooper basin in exchange for assuming future abandonment and reclamation liabilities, plus a gross overriding royalty (ORRI). These permits are in close proximity to ATP 934, and cover a combined area of 267 sq. km.
“Ongoing exploration in this region, given recent very successful drilling results offsetting ATP 934 to the south, has the potential to add value for Bengal shareholders by de-risking our own exploration targets and creating optionality in accessing infrastructure for the prospecting licenses to deliver into the attractive eastern Australian natural gas market,” said Chayan Chakrabarty, Bengal Energy’s CEO.