MEO Australia Assigns Bonaparte Gulf Exploration Permit to Origin

MEO Australia has reached agreement to assign its 50 percent interest in the WA-454-P exploration permit, in the Bonaparte Gulf, offshore northern Australia to Origin Energy Resources. 

“The assignment follows extensive consideration by the company of its strategic focus and allocation of capital to its asset portfolio,” MEO said on Monday. The company had actively sought an additional partner for WA-454-P to minimise the company’s remaining exposure to overall exploration and drilling costs, however due to the current depressed farm-out market, this was unsuccessful.

According to MEO, the permit no longer had the risk-reward profile that matched the company’s strategic objectives, which have increasingly moved towards lower cost onshore projects such as the Block 9 PSC in Cuba. 

MEO received A$5.6 million in cash payments from Origin from the original farm-out agreement for WA-454-P, in 2013-2014.  The agreement includes provisions to effectively back-date the assignment to December 2015 as consideration for MEO’s 50 percent interest, allowing MEO to avoid all expenditure associated with WA454-P in 2016 and 2017, when an exploration well is obligated to be drilled and substantial expenditure incurred.

Following MEO’s assignment, Origin will have a 100 percent interest in the permit.