Santos farms in to onshore McArthur Basin in the Northern Territory
Wednesday, Dec 12, 2012Santos today announced the execution of a farm-in agreement in the McArthur Basin prospective shale gas and oil resource in the Northern Territory.
The farm-in agreement with Tamboran Resources Pty Ltd provides for Santos to earn up to 75% in Exploration Permits 161, 162 and 189 and 299 (A), covering approximately 25,000 square kilometres.
Under the terms of the farm-in, Santos will immediately earn a 50% operated interest in the four permits by funding a $41 million phase one work program within three years.
Upon completion of that program, Santos will have the option to earn a further 25% interest in the permits by funding a $30 million phase two work program including the drilling and testing of two wells.
The agreement is subject to the standard regulatory approvals.
Santos has also agreed to acquire a 14% interest in Tamboran for $10 million.
Santos Vice President Western Australia and Northern Territory John Anderson said the permits offered great potential, not only in terms of gas but also liquids.
“There’s also the added attraction of their proximity to critical infrastructure like a major highway, gas pipelines and a railway. The nearby Alice Springs to Darwin gas pipeline connects not only with major domestic users but also export markets,” he said.
Santos has operated the existing Mereenie field in the Amadeus Basin since 1993, and in October this year announced a farm-in agreement with Central Petroleum over 13 permits in the Amadeus and Pedirka Basins.
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