Karoon Gas (ASX: KAR) is acquiring a 100% interest in an offshore Carnarvon Basin block from U.S. independent Liberty Petroleum Corporation that could host several trillion cubic feet of gas.
The company will earn its equity by managing the permit and be solely responsible for the programs, budgets and expenditure during the first two permit years.
Karoon will be required to licence 3,800 square kilometres of reprocessed 3D seismic and about 5,000 line kilometres of reprocessed 2D seismic data during the first year and acquire and process 2,010 square kilometres of new 3D seismic during the second year.
This is expected to cost about A$16.5 million.
It will have the option to withdraw from the permit after the second year, or take on the well commitment in year 3 and seek to farm out an interest.
Liberty is entitled to certain milestone cash bonuses and a royalty in the event of production
The primary target traps in WA-482-P are intra Mungaroo levels where clastic reservoirs are interpreted to present in early formed traps and have received early hydrocarbon charge from thick Triassic and Lower to Middle Jurassic source rocks.
A key element of the work program is to identify prospects unbreached by structural events from late Jurassic onward.
Supporting this exploration model is the small Phoenix gas field to the east that has gas trapped in an early formed structure. The play type also has similar characteristics to the successfully explored Intra Mungaroo Formation fairway on the Exmouth Plateau to the south.
Higher risk, shallower targets may be present above the top Mungaroo Formation.
Karoon's mapping and assessment to date has identified four main prospects with preliminary estimates of prospective resources in each of between 0.5 to 3 trillion cubic feet of gas.
The work program is expected to further define the size, risk and numbers of prospects before a decision on drilling can be made.
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