Orca Energy (ASX: OGY) will receive around $7 million in value from the sale of its 20% participating interest in South Australian petroleum exploration licence (PEL) 115 to Senex Energy (ASX: SXY).
The deal will leave Orca in a strong financial position with over $3 million in cash, while being carried for all of its Cooper Basin activities for the next 12 months.
The consideration which makes up the $7 million package of benefits includes free carry for oil exploration and development in the southern Cooper Basin.
Under the agreement Orca will retain its 20% interest in two key assets within PEL 115, namely the Fury oil discovery and the Burruna‐1 oil exploration well.
The parties will apply for a separate licence for the Fury and Burruna blocks, which will be known as the Fury Joint Venture and operate under the terms of the existing PEL 115 joint venture (Senex 80% and Operator, Orca 20%).
Production testing to begin at Fury-1
In other Orca news, the company has been advised by joint venture partner Senex Energy (operator), that the Fury‐1 oil exploration well in Western Australia will be completed and placed on a 10 day initial production test in the coming weeks.
The test will evaluate deliverability of the resource within the Fury oil field.
The Fury‐1 oil discovery was drilled by Victoria Petroleum in 2009 to assess the oil charged Murta Member, with the presence of an oil column over an 18 metre gross interval was interpreted from the wire line logs, MDT data and sidewall cores. An additional oil sand was also confirmed in the Permian Epsilon Formation.
Full consideration details for $7m in value
The consideration for the sale which includes a range of operational, financial and corporate benefits for Orca that equate to around $7 million include:
- Cancellation of Senex’s 19.99% interest in Orca (115,000,000 shares placed to Senex at 3.5c per share in January 2012);
- Reimbursement of Orca’s costs for work associated with the Kingston Rule‐1 and Hornet‐1 unconventional gas exploration wells in PEL 115;
- Free carry for Orca’s 20% share of costs for the completion and initial production test of Fury‐1;
- Free carry of Orca’s 20% share of costs to drill, case and suspend a proposed horizontal well in the Fury or Burruna Block; and
- Free carry of Orca’s share of costs for the current Dundinna 3D seismic survey in PEL 110 (Senex 60% and Operator, Orca 20%).
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