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MEO Australia Acquiring Offshore Northern Territory Petroleum Permit

MEO Australia (ASX: MEO) is acquiring a 65% stake in an exploration permit offshore Northern Territory held by private company Finder Exploration that is located between two of its existing permits.

NT/P79 covers a 6,415 square kilometre area in the Joseph Bonaparte Gulf and contains several geological features that MEO will assess once it receives 2D seismic that was recently acquired by Geoscience Australia.

The permit is currently in Permit Year 4 and no additional seismic acquisition is planned as MEO considers there is sufficient new seismic data to assess whether one of the identified geological features can be matured to drillable prospect status.

"MEO is very pleased to be partnering with Finder. This acquisition on close to ground floor terms represents an opportunity for MEO to broaden its footprint in an area in which we have substantial experience and technical knowledge," managing director Jürgen Hendrich.

Farm-in terms

Under the agreement, MEO will acquire a 65% participating interest and operatorship of the permit in return for reimbursing Finder $200,000.

MEO will also carry 100% of the study costs through to completion of a joint farmout subject to confirmation of a drillable prospect.

The parties have a drill/drop election decision before entering the final permit year in June 2014

Studies to be carried out include a prospect identification study by 23 June 2013 as well as geophysical and geochemical technical studies and a well proposal by 23 June 2014.

Each of these stages is expected to cost about $100,000.

In the sixth and final year, the NT/P79 joint venture is required to drill an exploration well, which is expected to cost about $6.1 million.

Regional prospectivity

NT/P79 is adjacent to MEO's existing NT/P68 (50%) and WA-454-P (100%) permits.

WA-454-P contains the Marina gas discovery and Breakwater oil prospect while NT/P68 contains the Heron gas field.

Marina was discovered by ExxonMobil (NYSE: XOM) and Drillsearch Energy (ASX: DLS) in 2007 and is independently assessed to contain high estimate (3C) Contingent Resources of up to 302 billion cubic feet (Bcf) of gas and 29.5 million barrels (MMbbl) of oil.

The nearby Breakwater prospect could potentially host prospective resources of up to 2.7 trillion cubic feet (Tcf) of gas and 87MMbbl of condensate in the "gas only case" or 2.4Tcf of gas and 276MMbbl of oil/condensate in the "gas and oil case".

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