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WA gas prospectors drawn to offshore well

WA gas prospectors drawn to offshore well

BP has signed up to undertake exploratory drilling at the Ironbark prospect, located off the coast of Western Australia in the Carnarvon Basin.

Firms: Allens (Cue Energy Resources Ltd); in-house counsel (BP Developments Australia Pty Ltd)

Deal: A deal has been struck for BP Developments Australia Pty Ltd (BP) to drill at two sites in WA under the terms of energy exploration permits issued to Cue Energy Resources Ltd (Cue Energy).

Value: Undisclosed

Area: Energy & resources

Key players: The Allens team advising Cue was led by partner Mark McAleer. Associate Miranda Hicks assisted.

Deal significance:

Two exploration permits issued to Cue Energy for its Ironbark prospect, mapped between WA-359-P and WA-409-P, are subject to a joint venture with BP. The company estimates 15 trillion cubic feet of gas reserves can be accessed by drilling at the site.

According to Cue Energy, the site is “an exciting new play type associated with the prolific gas-bearing Mungaroo Formation” and Ironbark has been identified as a “significant drillable target”.

The prospect area sits in the Carnarvon Basin, which is an offshore basin stretching more than 1,000 kilometres from WA’s west and north-west coast.

The joint venture between Cue and BP was executed by way of farm-out and option arrangements. As part of the deal, BP will operate WA-409-P and fund all of the work required under the permit for the first three years of its renewal. BP will acquire 80 per cent interest in the exploration.

An option has also been granted to allow BP to acquire a 42.5 per cent interest in WA-359-P in exchange for funding 50 per cent of the exploration. The option is valid until May 2017.

Cue and BP are searching for more partners to join their drilling exploration of the Ironbark well.

Mark McAleer, Allens lead partner advising on the deal, described Ironbark as an “exciting prospect”.

“If proven and commercialised, Ironbark could be a transformational development for the company.

“As a long-standing client of the firm, we are delighted to have been able to assist Cue with this important transaction,” Mr McAleer said.

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