"Beach Petroleum and Essential Petroleum have spudded Fermat #1 in VIC/P46 in the offshore Otway Basin. The problem for Essential is it doesn’t have the funds to pay for its share of the costs of the well (see EPR media release of 17 December).
The EPR Board is working “vigorously” to either farm down its 25% interest or raise sufficient funds to cover its joint venture obligations.
So what happens if Fermat #1 actually hits the 1.1 Bcf of gas that EPR and Beach think is the target? EPR wouldn’t have any difficulty raising the cash then. But we just don’t know.
Fermat #1 was at 2,807 metres and preparing to drill ahead. on 31 December. Target depth is 3,640 metres which it should reach in the next week or so. An interesting situation."
EPR Price at posting:
3.1¢ Sentiment: Buy Disclosure: Held
