PERTH (miningweekly.com) – Australian energy major Santos has signed on for the Stage 2 exploration of the Southern Amadeus joint venture (JV) with ASX-listed Central Petroleum.
In October 2012, the two companies signed a A$150-million JV agreement to explore and potentially develop up to 13 permits in the Amadeus and Pedirka basins, in central Australia.
Under the terms of the farm-in agreement, Santos could earn the rights to up to 70% of the project area, totalling nearly 80 000 km2, by spending A$150-million over three tranches.
Phase 1 of the farm-in had confirmed the prospectivity of the Southern Amadeus prospect, most particularly the Mt Kitty deposit, with an additional 300 km of seismic drilling now being added to the current 1 000 km of two-dimentional seismic earmarked for the more prospective Southern Amadeus, following Santos’ and Central’s election not to proceed as a JV in the Pedirka basin.
The Stage 2 farm-in, therefore, would result in an additional 1 300 km of two-dimensional seismic being acquired in the Southern Amadeus area, at an estimated cost of around A$12-million, earning Santos a 40% participating interest in the permits.
Central said on Thursday that it expected Santos to determine its position regarding further Mt Kitty testing, and its commitment to the North West Mareenie JV by the end of August.
Meanwhile, Central told shareholders that it had been able to temporarily suspend its permit work commitments in the Pedirka basin to enable the company to negotiate a more targeted acreage holding in the area.
The Wiso basin has also now become a priority, following the review of existing and recently acquired data. The review has reaffirmed interest in the Northern Territory sector of the Amadeus, and downgraded the prospectivity of the Western Australian acreage applications, which would no longer be pursued.