Galilee Energy’s majority owner is Eastern Corporation. The farm-in agreement, between AGL and two of Galilee Energy’s wholly owned subsidiaries, will see AGL investing up to A$37 million over two stages to acquire a 50% interest in exploration tenement ATP 529P.
AGL noted that the first stage of the program will involve the Rodney Creek production pilot in ATP 529P at a cost of A$20 million. Work on the first stage is expected to commence by November 2008.
The second stage will involve an exploration and appraisal work program during financial years 2010 and 2011 at a cost to AGL of A$17 million. The parties have also entered into a 10-year gas marketing agreement. Under the terms of the farm-in, AGL will assume operatorship of the joint venture under a joint operating agreement.
Michael Fraser, AGL managing director, said: This farm-in agreement is a further step in growing AGL’s gas reserves through targeted exploration and appraisal drilling, utilizing the skills AGL has developed as operator of the Camden Gas Project joint venture.