Norwest Energy entered into a farmout agreement with Transerv Energy and Triangle Energy (Global) Ltd. for the Xanadu-1, within TP/15, a block currently 100% owned by Norwest Energy (Norwest) via subsidiary Westranch Holdings.
TP/15 is located in the offshore northern Perth Basin, Western Australia. Norwest is planning to drill a well on the Xanadu prospect, located at the southern end of TP/15, and holding an un-risked recoverable resource of 160 MMbbl.
According to the terms of the agreement, Transerv will farm-in Xanadu-1 by contributing 20% of the costs to earn a 15% interest, and Triangle will contribute 40% of the costs to earn a 30% interest.
The intent is that the farmout process be completed by 31 December 2016 or such later date as agreed. By the end date, if the farmout process has not delivered farmout agreements that fund 100% of the drilling costs of Xanadu-1, then Transerv and Triangle shall have no interest in TP/15 and shall have no obligations under these termsheets with respect to TP/15.
With today’s announcement and numerous other parties currently reviewing the TP/15 dataset, it is expected that a joint venture will be finalized by December 2016. In the meantime, Norwest continues to work through the regulatory process required to drill the well.
Norwest CEO Shelley Robertson said, “We look forward to working closely with both Transerv and Triangle to enhance our understanding of the TP/15 permit, and to drill the Xanadu-1 well. Finalization of this joint venture and the subsequent drilling of the well will be considered a significant achievement in the current environment, and will represent a major milestone for Norwest shareholders.”
The timing of Xanadu-1 will be dependent upon regulatory approvals and rig availability, however Norwest is currently working closely with rig companies and other operators planning wells in 2017, to ensure the well can be drilled as efficiently and cost-effectively as possible.
Map of TP/15, from Norwest.
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