Central Petroleum has entered into a farmout agreement with Peak Helium to fund two new sub-salt exploration wells in Amadeus Basin, Australia.
The two sub-salt exploration wells include one at Mt Kitty and the other at either Magee or the nearby Mahler prospect.
The deal will allow Peak Helium to secure various interests in certain Amadeus Basin exploration tenements.
As per terms of the agreement, Peak will secure partial interests from Central in three permits, including 31% in EP82, 10% in EP112 and 6% in EP125.
After the transfer of interests, Central will have 29% in EP82, 35% in EP112 and 24% in EP125.
Central also has interests in EP105, EP(A)111 and EP(A)124 blocks, which are not included in farmout to Peak.
Central CEO and managing director Leon Devaney said: “Today’s agreement with Peak is a great catalyst for a major near-term exploration drilling campaign targeting not only the Dukas prospect, but also two other very attractive sub-salt prospects.
“We have clear joint venture alignment and full funding for the Mt Kitty and Magee / Mahler sub-salt exploration wells based on current drilling cost estimates.”
With a cap of $20m gross cost per well, Peak will be responsible for Central’s costs for two new exploration wells in the Amadeus Basin.
Three sub-salt exploration wells, including the planned Dukas exploration well, are expected to be prioritised for drilling in the Southern Amadeus Basin.
Santos has also entered into farmout arrangements with Peak for its stakes in EP82, EP112 and EP125, as well as its interests in EP105, EP(A)111 and EP(A)124.
Upon the completion of Central and Santos farmouts to Peak, the relevant joint ventures will focus on drilling sub-salt wells at Dukas, Mt Kitty and Magee / Mahler to target helium, hydrogen, and hydrocarbon gases.
The drilling is expected to be commenced in 2023.
In November last year, Central Petroleum and its partner Incitec Pivot have restarted the development of the Range gas project in the Surat Basin in Queensland.
