I like your posts Fastcar they're well thought out and factual.
I might add, the latest announcement from PGS provides details which confirm your comment below about drilling soon, "... with $5M in the bank from a clearly positive indication SXY will be aiming hard to hit something in PEL 514...probably sooner rather than later"_
and from the ann':- The consideration is in addition to Senex’s current farm in obligations in respect of PEL514 including the completion of the current Cordillo 3D seismic program and completion of two wells by November 2013.
This article below is from Upstreamonline Danica Newnham
15 May 2013 03:00 GMT.
Australia’s Senex Energy has committed to further work on an exploration block in South Australia’s Cooper basin, joint venture partner Planet Gas said on Wednesday.
The pair entered an agreement stipulating that Senex is to make cash payment of A$5 million (US$4.94 million) to Planet Gas to acquire a further 10% interest in PEL 514 North and a 30% stake in PEL 514 South.
This deal follows on from an initial farm-in agreement signed in December 2011. Upon completion of the transaction, it will effectively reduce Planet Gas’ stake in the entire 1972-square kilometre PEL 514 permit to 20% with Senex holding the remaining 80% interest and retaining operatorship.
In addition to the cash payment, consideration includes Senex carrying Planet Gas for a total of A$9 million of its share of oil exploration expenditure in the block.
Senex will also be required to pay Planet Gas a further A$5 million upon certification of 8 million barrels of proven and probable reserves in the block, plus an A$5 million upon certification of an additional 4 million barrels of proven and probable reserves.
Furthermore, Planet Gas will receive a royalty calculated as 2% of the net well head value of all oil produced from the permits, capped at A$7.5 million.
Exploration work in PEL 514 is focused on conventional stratigraphic and structural traps within the Jurassic sequence, including the Birkhead formation. The block also contains potential for unconventional gas including hydrocarbon rich shales, tight gas and gassy coals.
Planet Gas managing director Anthony McClure said the transaction, which is subject to regulatory and government approvals, would enable Senex to concentrate on exploring and developing the Jurassic oilfields and bringing them into production.
“What has been important to Planet Gas is to see expanded activities in PEL 514 to the point where production may be commenced with no risk to the company and importantly, no dilution to the company’s share capital base in difficult market conditions,” he said in a statement.
As part of the initial 2011 farm-in agreement, Senex is required to complete the current Cordillo 3D seismic programme and drill two wells by November this year.
PGS Price at posting:
1.9¢ Sentiment: None Disclosure: Not Held
