BP has completed its deal with Cue Energy to take 80% interest in and operatorship of permit containing the Ironbark prospect, offshore northwest Australia.
Under the deal, BP will fund 100% of the required work program on exploration permit WA-409-P for the next three years. BP also has an option through to May 2017 to acquire 42.5% equity in neighboring permit WA-359-P, which Ironbark is thought to straddle into, from Cue.
If BP exercises this option, 50% of the cost of drilling a well in WA-359-P will be funded, says Cue, which hopes to drill a well on Ironbark in 2018.
Cue completed a regional study using 15,000sq km of 3D and 2D seismic data and 17 well ties to map the Triassic intra-Mungaroo sands (as encountered at the Gorgon gas field) and identified the Ironbark prospect, in moderate water depths, as a drillable target.
Ironbark is a giant Mungaroo Formation prospect that is mapped with an area of up to 400sq km with a best technical estimate of 15 Tcf of prospective recoverable gas resource based on an internal technical assessment performed by Cue.
Wood Mackenzie estimates that the North West Shelf LNG plant and infrastructure will have spare capacity from 2021.The Ironbark prospect is less than 50km from the North Rankin platform (North West Shelf LNG) and in close proximity to Pluto and Wheatstone LNG infrastructure, providing cost effective commercialization options.