AuDAX Resources Ltd to enter search for Oil and Gas in the...

AuDAX Resources Ltd to enter search for Oil and Gas in the Cooper Basin
The Directors are pleased to announce that AuDAX has today entered into a Joint Venture
Agreement enabling it to earn a 49.9% interest in a very exciting exploration project in the
Cooper Basin in South Australia. The joint venture enables AuDAX to participate in the
search for oil and gas in one of the country’s most prospective regions at a time when these
commodities are very much in demand.
The joint venture will add to the Company’s exploration portfolio and supplement the
existing and ongoing hard rock exploration programs.
AuDAX will earn a 49.9% in the licence from Eagle Bay Resources NL (EBR) by
contributing $250,000 towards obtaining Native Title clearances and reprocessing available
seismic data over onshore petroleum exploration licence 182 (PEL 182). The Company
will maintain the 49.9% interest in the licence by drilling the first three proposed
exploration wells planned for the second quarter of 2005. The cost will be capped at $4.5m
and thereafter parties will contribute proportionate to the interest held.
The licence covers an area of 1,745 square kilometres and is located 60 kilometres north of
processing facilities at Moomba, which is 770 kilometers north of Adelaide. Production
licences within the external boundaries of PEL 182 are serviced by oil and gas pipelines
which should enable early production from any joint venture discoveries. (see attached
map).
The EBR bid is worth $21.55 million in total and includes 11 oil and gas wells,
geoscientific studies and 70 kilometres of seismic acquisition in the first three years of the
program.
On the awarding of the block, the South Australian Mineral Resources Development
Minister Paul Holloway said;
“The level of interest in this block reflected the petroleum exploration industry’s faith in the
potential of CO 2003-A (PEL 182).
The block contains known oil and gas prospects and leads, and abuts producing oil and gas
fields.
The Cooper Basin remains the preferred onshore Australian exploration investment
destination.
Between 2002 and the end of August 2004, new entrant explorers were involved in drilling
33 exploration wells.
New petroleum pools have been discovered in 18 (54%) of the wells drilled. A respectable
45% commercial exploration success rate has been achieved through this program.
In the 30 months to June 2004, the Santos joint venture has drilled 124 new wells, with
90% successful in encountering commercial quantities of petroleum.
The new licence will be granted once the ‘right to negotiate’ process has been successfully
concluded between the South Australian Government, registered Native Title claimants and
the applicant EBR.”
It is anticipated that native title negotiations will take approximately six months, during
which time the joint venture proposes to acquire the computerised database of all existing
seismic and well data relating to the licence area, and produce a detailed prospect by
prospect report on the potential of the area prior to the formal issue of the Petroleum
Exploration Licence.
The estimated budget for this work and the native title negotiations is $500,000. The joint
venture partners have agreed to contribute equally to this “initial work” after which
AuDAX shall earn its 49.9% interest in the licence
A preliminary geological assessment of PEL 182 by Mr Ian Barr B.Sc. Geology included
the following;
“In the south eastern corner of PEL 182 nine prospects have been successfully drilled as
commercial discoveries in a 12km wide corridor between existing oil and gas pipelines.
A further 6 smaller but undrilled structures remain to be drilled in this corridor and it is
reasonable to expect a commensurate discovery rate would be experienced when EBR and
AuDAX drill these structures. Adjacent pipeline facilities should facilitate the early
commercial production of discoveries in this corridor.
In the north west and north east of PEL 182 larger oil prone stratigraphic traps have been
mapped at the pinchout of the Jurassic and Triassic sequence – some of these prospects
may require further 3D seismic definition.
A project location plan and a more detailed seismic interpretation of the SE pipeline
corridor shows discovery oil and gas fields in red and green (these are not assets of EBR or
AuDAX) and the adjacent smaller but undrilled prospects in hatching”.
Exploration for oil and gas is seen by the Directors as an extension of its existing
exploration experience.
AuDAX will continue with its ongoing hard rock exploration on existing projects including
Millrose, Marymia and Bronzewing South.
Yours faithfully
GARY J. ROPER
Managing Director
The information in this report as it relates to mineralisation is based on information compiled by Mr Ian Barr
who is a geologist and a Competent Person as described in Appendix 5A to the ASX Listing Rules. The report
accurately reflects the report compiled by Mr Ian Barr.