Tellus Resources (ASX:TLU) and wholly owned subsidiary PNC AUST have agreed to a farmout arrangement with Senex Energy (ASX:SXY) over its PEL 105 tenement in the Cooper Basin, South Australia.
Upon signing a Heads of Agreement, PNC will transfer a 50% interest in PEL 105 to Senex, subject to ministerial approval and both parties completing the terms of the HOA.
PNC is required to continues drilling preparations for the Pirie 1 well, with Senex to contribute $3.5 million towards drilling costs in two equal tranches of $1.75 million: the first prior to spud, expected in 5 days, and the second 25 days after.
Following the rig release on Pirie 1, PNC will transfer operatorship of the Permit to Senex, who will then sole fund a further well in the Permit on or before June 30, 2014.
Following this, PNC will transfer a further 20% interest in the block to Senex.
The Pirie 1 well is targeting Birkhead, Toolachee, Patchawarra and Tirrawarra oil and wet gas prospects; recoverable oil in the Tirrawarra could surpass 3 million barrels.
Garnering the technical and financial support of a company of Senex's calibre indicates the quality of the target and is a significant leap forward for Tellus, a $9 million company new to the oil and gas exploration game.
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