BP is getting an extension from Cue Energy Resources that will give the UK firm more time to consider acquiring 42.5% stake in WA-359-P permit in the Carnarvon basin, offshore Western Australia.
Cue Energy has agreed to extend the 42.5% equity option over exploration permit WA-359-P granted to BP Developments Australia last year in October. The extension will be until 25 October 2017.
By selling the stake, Cue Energy plans to secure partner or partners to join with BP and itself in the WA-359-P location to drill an exploration well in 2018 and to test the Ironbark prospect.
BP owns a 80% stake and is the operator in the WA-409-B, the adjustment permit to WA-359-P.
Ironbark is expected to be a giant Mungaroo Formation prospect, mapped in an area of up to 400km2 with an estimated 15 Trillion cubic feet (Tcf) of prospective recoverable gas resource based on an internal technical assessment performed by Cue.
According to an estimate by Wood Mackenzie, the North West Shelf LNG plant and infrastructure will have spare capacity from 2021.
The Ironbark prospect is less than 50km from the North Rankin platform (North West Shelf LNG) and in close proximity to Pluto and Wheatstone LNG infrastructure, providing cost effective commercialisation options.
Cue Energy said: “A number of International companies are currently engaged in the WA-359-P data room process and the extension of time will enable the results of 3D seismic reprocessing currently underway to be incorporated into their analyses."
If BP exercise the option over WA-359-P, 50% of the Ironbark well cost will be funded.
Recently, Cue Energy stated that it is under an obligation to reimburse monies spent by the incoming party in the Jeruk field within the Sampang PSC in Indonesia.
The dispute, which was active since 2011 was settled recently through arbitration and the company had to pay $6.8m in settlement.