Ambassador Oil Farms Out Interest in Cooper Basin Permit

Ambassador Oil and Gas has farmed-out a 52.5% working interest in its highly prospective PEL 570 exploration permit in the Cooper Basin in South Australia to New Standard Energy for $42.5 million in direct exploration expenditure, the company said on Tuesday.

New Standard will operate the permit and carry the costs for the five year program up to a maximum of $42.5 million to earn the 52.5% equity interest in PEL 570.

“The deal also brings one of the US shale industry pioneers, Magnum Hunter Resources Corp, to help guide exploration for the high liquids content/low CO2 gas targets known to exist in Cooper Basin permit PEL 570,” Ambassador further said.

As per the company, the new, higher value deal, supersedes an earlier Heads of Agreement between Ambassador and Outback Energy Hunter, announced in August 2013, which carried an implied value of around 16 cents per Ambassador share.  Outback Energy Hunter is being acquired by New Standard Energy as part a broader corporate transaction which is due to complete in January 2014.

The PEL 570 farm-in is part of a broader transaction for New Standard Energy, which is also acquiring Magnum Hunter’s Eagle Ford shale assets in the US.

Sign-up for our free weekly newsletter update via email here