SINGAPORE - catalist-listed energy company Rex International Holding announced on Thursday its wholly owned unit, Rex Bonaparte Gulf, will acquire a 30 per cent participating interest in the offshore WA-488-P licence in Western Australia from a wholly owned unit of oil and gas company MEO Australia at "ground floor terms".
WA-488-P is located in the Petrel Sub-basin between the producing Blacktip gas field and the undeveloped Turtle and Barnett oil discoveries. It spans 4,074 square kilometres.
The Beehive prospect, located in 40 metres of water, was identified as a potential giant oilfield, with total gross unrisked prospective recoverable resources of 926 million stock tank barrels (MMstb) (P50) in the lower carboniferous and the ordovician formations.
Chief executive Måns Lidgren said in a statement: "Initial due diligence analyses of the Beehive prospect in WA-488-P using Rex Virtual Drilling are encouraging and consistent with MEO's geological assessment. However, as the prospect is covered only by 2D seismic data, albeit of high quality, the partners agree that doing a 3D seismic survey will enable further de-risking of the prospect ahead of the drilling scheduled to take place at the earliest in late 2016.
"The Beehive prospect fits the review criteria of our in-house giant oilfields taskforce. We see this farm-in as a good opportunity to build up a pipeline of future projects."
The farm-in agreement also provides Rex with two options. It can acquire an additional 20 per cent participating interest in WA-488-P, in return for procuring full funding of a 3D seismic survey over the Beehive prospect and a payment of US$500,000 in cash to MEO (if MEO has not secured alternative funding) before June 30.
Alternatively, it can adopt the seismic option, which involves obtaining an additional 10 per cent participating interest by fully funding a 3D seismic survey after June 30.
According to the statement, Rex has a further option to acquire an additional participating interest after exercising the seismic option such that it may then have an aggregate participating interest of 80 per cent. This is in return for procuring full funding of the proposed Beehive-1 well, in the event that MEO has not secured alternative funding.
The group said MEO is understood to be actively seeking additional farm-in partners for the Beehive prospect.