BP to Operate Ironbark Prospect, Near NWS
BP, Beach Energy, Cue Energy Resources and New Zealand Oil and Gas have agreed to form a joint venture to drill the Ironbark-1 exploration well in WA-359-P offshore Western Australia.
Cue, which is currently Ironbark operator, made the announcement October 26. It will also secure a carry on some of its drilling costs from its partners.
Ironbark is a prospect with an area of up to 400 km2 and a best technical estimate of 15 trillion ft3 of prospective recoverable gas resource based on an internal assessment performed by Cue. Moreover, it is less than 50 km from the North Rankin platform - which ties into North West Shelf LNG plant - and is also near the Pluto and Wheatstone LNG infrastructure.
Title transfer and joint venture formation is targeted during 2Q 2019, once certain conditions including regulatory approvals are fulfilled. Until then, Cue will retain 100% equity in WA-359-P and BP will act as operator on Cue's behalf regarding planning for the Ironbark-1 well.
Cue also announced the execution of an agreement for New Zealand Oil and Gas (NZOG) to acquire 15% equity in WA-359-P. Once completed, WA-359-P participating interests will be: BP (operator) 42.5%; Australian firms Cue 21.5% and Beach Energy 21%; plus NZOG 15%. The deal is subject to Cue receiving shareholder approval for the NZOG farm-in and regulatory approval of the well timing.
BP, Beach and NZOG will collectively fund $11.3mn of Cue’s share of the Ironbark-1 exploration well costs. Cue will fund its remaining share of the well cost from its current cash reserves, which will be escrowed as required under the agreement.
Cue also has advised that its 42.5% equity option over exploration permit WA-359-P granted to BP, as announced in October 2016, has been extended until April 2019.