Australia: BP set to farm into giant gas prospect as license term extended

The Australian authorities have granted an extension for Cue Energy’s work program and permit term over an offshore license containing what is believed to be a giant gas prospect Ironbark. This opens doors for BP and other partners to farm-into the block, under terms signed in October last year.

Cue on Wednesday said it had received approval of a suspension and extension to the work commitments for the WA-359-P years 3 and 5 for 24 months until April 25, 2021. A corresponding extension to the permit term has been approved to April 25, 2021.

“The approval allows a suitable timetable for the Ironbark prospect in the permit to be drilled next year. Cue estimates Ironbark contains a best estimate 15tcf of prospective recoverable gas resource,” Cue Energy said.

While Cue Energy currently holds a 100% share in the license, oil and gas major BP is acting as operator on behalf of Cue under a coordination agreement that will see BP, NZOG, and Beach Energy farm-into Ironbark this year.

BP has this week submitted an environment plan for a pre-drilling survey at the Ironbark project. The company in February hired Diamond Offshore-owned semi-submersible drilling rig Ocean Apex for the drilling of the Ironbark prospect, with the spud date set for late 2020.

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Cue: Ironbark is a company-changing prospect

Commenting on the license term extension on Wednesday, Cue CEO Matthew Boyall said the extension was important as it satisfied a condition of previously announced agreements with BP Developments Pty Ltd (BP), Beach Energy (Beach) and New Zealand Oil & Gas to form a joint venture to drill the prospect.

He said: “The grant of this extension fulfills the final material condition of Cue’s agreements with BP, Beach and New Zealand Oil & Gas. Applications have been submitted for the remaining title transfer approval condition and BP will become operator once the transfers have been approved.

“High quality partners, 100 percent of well funding and permit tenure have now been secured for the Ironbark-1 well. The Ocean Apex drilling rig has been contracted and the well is expected to spud in late 2020.”

“This is an exciting time for Cue. Shareholders now have the opportunity to participate in a fully-funded well with a 21.5 percent participating interest. This is a 15tcf prospect, 50 kilometers from existing LNG infrastructure. “It will be company-changing if the well is successful.” Matthew Boyall said.

Exploration Permit WA-359-P is located in the Carnarvon Basin, offshore Western Australia. The Ironbark-1 well is expected to drill to 5500 meters. It will be the first test of the Ironbark prospect.

Offshore Energy Today Staff

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