2013 OXX Annual Report"As a result of various agreements (first...

2013 OXX Annual Report

"As a result of various agreements (first entered into in
2008) for the disposition to Shell Development (Australia)
Pty Ltd (Shell) of a 100% working interest in WA-384-P,
the Octanex Group holds residual rights in WA-384-P in
the form of discovery payments and royalties, as well as
rights of re-conveyance.
The original agreements also included the WA-385-P
and WA-394-P permits. However, during the year and
following the Octanex Group’s decision to not exercise
its right of re-conveyance, an offer by the regulatory
authority to renew WA-394-P was declined by Shell.
Then subsequent to the end of the year, an application
to renew the WA-385-P permit was not pursued by either
Shell or Octanex.
In October 2012, Shell commenced drilling the
commitment well in WA-384-P required under the
relevant agreement mentioned above (see Figure 4).
Shell contracted the semi-submersible rig, Noble Clyde
Boudreaux, to drill the Palta-1 gas exploration well; which
was originally expected to take up to 90 days to drill.
Drilling operations were affected by significant periods of
downtime and delay due to equipment failure, cyclonic
activity and limited helicopter coverage. Palta-1 was to be
drilled in water depths of approximately 1300m and to a
total depth of greater than 5000m.
On 1 August 2013, Shell advised Octanex that Palta-1 had
reached total depth and logging results confirm that it did
not encounter commercial hydrocarbons. The well was
then being plugged and abandoned. Shell also confirmed
that well operations had been conducted without any
reportable safety or environmental incident.
The Palta-1 well is the final work programme obligation
for the extended Year 6 of the WA-384-P permit’s initial
term; which was to end on 20 August 2013. In order to
provide time to evaluate the results of the Palta well,
Shell applied for and was granted a six month suspension
of the Year 6 work programme for WA-384-P and the
permit’s term was extended for the same period."