WHL Energy (ASX: WHN) has commenced the formal farm-out process its VIC/P67 oil and gas permit, which contains the La Bella gas and condensate asset, located in the offshore Otway Basin off the Victorian coast.
The move to a formal farm-out process follows strong industry interest to participate in the future development of the permit.
Steve Noske, managing director, said that the company has already fielded strong interest from a number of high quality, potential farm-in candidates.
"La Bella's known gas and condensate reserves, their location in close proximity to key infrastructure and rapidly growing gas markets, and the exploration upside within the permit, makes VIC/P67 a very attractive asset for any company that wants to be part of a relatively easy to develop, ideally located, high value project."
Noske confirmed that a decision on what form a farm-out agreement may take and how much equity WHL Energy may retain will be finalised during the farm-out negotiation process.
A data room has been opened in Perth - which will provide potential farminees with access to data covering past exploration and studies by previous operators as well as new work undertaken by WHL Energy. The process is forecast to run for the next two to three months.
Noske added that the plan to fast-track acquisition of 3D seismic over VIC/P67 is part of the work WHL Energy is undertaking or currently planning, while also being in discussions with an international subsea engineering and construction firm with regard to the undertaking of concept development studies.
"Our internal studies have shown that La Bella is a financially robust development opportunity, with a strong NPV and a quick rate of return on investment. We will now look to confirm that through independent consultants confirming the volumetric and development concept assumptions."
Background on VIC/P67
Besides La Bella, VIC/P67 contains several other gas prospects and leads. These include the relatively low risk prospects present at Highlander and West La Bella which provide additional tie-back opportunities to a potential La Bella development.
Larger, higher risk potential leads include the Lowlander Leads, which offer additional significant upside potential.
VIC/P67 is also located close to existing infrastructure including the Santos operated Casino gas development, Origin's Otway gas project, the BHP Billiton (ASX: BHP) operated Minerva development and TRU Energy's Iona gas plant.
WHL had committed to a A$62.1 million primary work program to secure the permit.
This includes the reprocessing of 1000 kilometres of 2D seismic, acquiring and processing of 811 square kilometres of 3D seismic as well as 650 kilometres of 2D seismic, 2 exploration wells and geotechnical studies.
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