Baraka Energy & Resources' (ASX: BKP) joint venture partner PetroFrontier (CVE: PFC) has advised the Foreign Investment Review Board of Australia and the TSX Venture Exchange have conditionally approved its amended farm-in agreement with Statoil.
Subject to final approval of the TSXV upon filing of final documents, the Norwegian state oil company will take up operatorship of the Southern Georgina Basin tenements in the Northern Territory.
It also noted that recording of the 385 line kilometre AMY 2D seismic program has started on EP 103, EP 104, EP 127 and EP 128.
This survey will fulfil the Northern Territory government work commitments for permit retention, delineate the southern and northwest basin margins and help outline prospective hydrocarbon target areas.
Data from the survey will be interpreted to target conventional hydrocarbons in the Cambrian Thorntonia and other formations and unconventional hydrocarbons in the Lower Cambrian Arthur Creek Formation.
The most promising areas will be seismically mapped out and the data will aid in identifying locations for exploration wells to be drilled as part of the 2013/2014 capital exploration program in the Southern Georgina Basin.
Statoil is taking over as operator of EP 103, EP 104, EP 127 and EP 128 as well as the exploration permit applications EPA 213 and EPA 252 under amendments to its farm-in agreement with PetroFrontier.
The Norwegian major will now spend the next US$160 million to fully fund exploration over three phases to the end of 2016, in return for 80% of PetroFrontier's working interest.
This adds to the US$30 million that PetroFrontier and Statoil had jointly spent since the farm-in agreement was reached mid last year and the first half of 2013 and will give Statoil a 80% interest in EP 103 and EP 104, 60% in EP 127 and EP 128 (excluding the Elkedra-7 area) and 80% in exploration permit applications EPA 213 and EPA 252.
Under Phase 1 and 2A, Statoil will spend US$50 million throughout the remainder of 2013 and 2014 to fully fund to a 385 kilometres 2D seismic program as well as drill and stimulate between four to six vertical test wells.
It can then proceed to Phase 2B, where it can spend US$30 million on exploration before moving on to Phase 3, which will require it spend US$80 million.
Baraka had previously stated that Statoil's greater role in the tenements is positive and could lead to the drilling of up to three wells drilled on its permits in 2014.
The company is not directly involved in the Statoil farm-in to PetroFrontier's interests and is responsible for its share of costs in EP 127 and EP 128, where it has a 25% stake.
It also holds a 75% stake it holds in the 75 square kilometre area around the Elkedra-7 well in EP 128.
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