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  • MEO Australia Partner Eni Australia To Drill Blackwood Appraisal Well 0 comments
    Feb 3, 2013 6:57 PM

    MEO Australia (ASX: MEO) has extended its alliance with Eni Australia with the Italian major exercising its option to drill an appraisal well in the Blackwood area of NT/P68 in the Timor Sea offshore Northern Territory.

    The well will evaluate the 2008 Blackwood gas discovery that intersected a 48 metre gross gas column.

    "The election by Eni to commit to evaluating the Blackwood gas discovery is a key milestone in the context of the Farm-in Agreement and the potential for the Blackwood resource to underpin a commercial development," MEO managing director Jürgen Hendrich said.

    Blackwood-1 flowed dry gas with 25-30% carbon dioxide, similar to the composition at Evans Shoal that Eni holds a 32.5% stake in.

    Blackwood farm-in

    Eni will earn a 50% interest in the Blackwood area by fully funding the drilling the Blackwood-2 well including production testing.

    It has 18 months from the date of election to drill the well.

    Eni can increase its interest by a further 25% by funding MEO's share of the work program required to reach a Final Investment Decision on Blackwood.

    Blackwood-1 ST1 was drilled to a total depth of 3,286 metres and encountered the gas column in the Plover Formation down to a preliminary gas-water contact at 3,188 metres subsea.

    Regional prospectivity

    Blackwood is close to the Shell-operated Evans Shoal gas discovery, which is estimated to hold 6.6 trillion cubic feet of gas, and the Heron gas field in NT/P68.

    It has the potential to be considered together with any discoveries at Heron and Blackwood for a joint development.

    Other wells in the vicinity include the giant Greater Sunrise field, the Barossa and Caldita fields that could either fuel an expansion of the Darwin LNG plant or a standalone floating LNG facility, as well as the Abadi field in Indonesia that will be developed through a FLNG vessel.

    Analysis

    While a drilling schedule has yet to be established, Eni's decision to drill an appraisal of the Blackwood gas discovery is a testament to the potential that the Italian major sees in the area.

    The Eni decision will be welcomed by investors, we expect the news to give MEO a boost this morning and its not unrealistic to expect that the announcement of a drilling date and well spud may act as further catalysts as would a successful well result.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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