Australian oil and gas explorer, Beach Energy, has agreed to acquire equity in Cue Exploration’s North West Shelf exploration permits WA-359-P and WA-409-P in the Carnarvon Basin, offshore Western Australia.
The two permits contain the Ironbark gas-condensate prospect covering an area of approximately 400 square kilometers with a potential to provide long-term gas volumes to feed nearby LNG plants in the coming decade.
Beach Energy notes that the prospect could have reservoirs of similar age to nearby giant fields such as Gorgon and Goodwyn, with a potential for a multi-Tcf gas field.
Ironbark is located less than 50 kilometers from the North West Shelf LNG’s Rankin platform, and is in close proximity to Pluto and Wheatstone LNG infrastructure, providing optionality for commercialization and marketing, Beach Energy said.
Under the agreement, Beach Energy will acquire 21 percent equity interest in WA-359-P in exchange for a one-off payment to Cue of A$900,000 for past costs, and future payments equating to 4 percent of Cue’s cost of drilling the Ironbark-1 exploration well within the permit.
The agreement is subject to conditions that, if satisfied, will see BP holding 42.5 percent in the permit with Cue and Beach holding 36.5 and 21 percent interest, respectively.
In exploration permit WA-409-P, Beach has acquired for nominal consideration a call option over a 7.5 percent equity interest.
Beach’s CEO, Matt Kay, said that the company has been searching exploration opportunities in Australia and New Zealand.
“With favorable Western Australia LNG market dynamics over the coming decade, successful development of Ironbark may align with expected shortfalls in LNG feedstock,” he said.