NZOG says rig booked for Ironbark drilling

Wednesday 13th February 2019

New Zealand Oil and Gas and its partners in the Ironbark project off Western Australia have secured a drilling rig for late 2020.

Operator BP Developments Australia has contracted Diamond Drilling’s Ocean Apex, a five-year-old semi-submersible rig capable of operating in 1,800 metres of water. BP has also started environmental planning for a site survey and drilling.

“Ironbark is a genuinely world-scale prospect in a highly prospective address,” NZOG chief executive Andrew Jefferies said. “We are excited to be moving this world-class prospect forward with significant equity.”

NZOG shares rose 2.1 percent to 49 cents, trimming their loss for the past year to 28 percent.

The Ironbark prospect lies in WA-359-P, about 50 kilometres north of the giant North West Shelf LNG development in the Carnarvon Basin. Its gas reserves are estimated at 15 trillion cubic feet, based on a best-case technical assessment.

NZOG subsidiary Cue Energy Resources has spent years trying to get Ironbark drilled in a basin where some gas discoveries are sitting undeveloped.

Melbourne-based Cue granted BP an option over a 42.5 percent operating stake in the permit in 2016. After several extensions of that option, Cue also brought Beach Energy into the venture in 2017 for a 21 percent stake. NZOG agreed to take a direct 15 percent interest in October.

As required by the October coordination agreement, Cue has placed US$8.08 million in an escrow account to secure its share of the well costs not covered by the other parties. NZOG says the other parties will provide their funds on completion of the agreement, which remains subject to a time extension for drilling from Australia’s National Offshore Petroleum Titles Administrator.

(BusinessDesk)

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