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Cue extends BP's option to farm into Ironbark

Written by  AOG Staff Wednesday, 13 December 2017 07:04
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Cue Energy said it has agreed to extend the 42.5% equity option over exploration permit WA- 359-P granted to BP Developments Australia. The exploration permit term of WA-359-P currently expires on 25 April 2018.

Cue intends to submit a suspension and extension application to the National Offshore Petroleum Titles Administrator to allow new technical information to be incorporated into the Ironbark-1 well planning process.

Last month, Cue announced an agreement with Beach Energy to farmout 21% equity in WA-359-P.

Under the terms of the agreement, Beach will acquire 21% equity and free carry Cue for 4% of the cost of drilling the Ironbark-1 exploration well in the permit. Beach will also reimburse Cue $900,000 for past costs.

“The agreement is conditional on BP exercising its option to acquire 42.5% equity in WA-359-P, Cue obtaining an extension to the current permit end date and other customary approvals,” Cue said in a statement.

Ironbark is a giant Mungaroo Formation prospect that is mapped with an area of up to 400sq km and a best technical estimate of 15 Tcf of prospective recoverable gas resource based on an internal assessment performed by Cue.

Wood Mackenzie estimates that the North West Shelf LNG plant and infrastructure will have spare capacity from 2021.The Ironbark prospect is less than 50km from the North Rankin platform and in close proximity to Pluto and Wheatstone LNG infrastructure.

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