Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed oil and gas developer WHL Energy has received regulatory approval for a multimillion-dollar farm-out agreement with Ophir Energy over its Seychells petroleum project area.
Under the terms of the agreement, Ophir could earn a 75% interest in WHL Energy’s offshore exploration assets.
Ophir would fully fund the acquisition of 1 500 km2 of three dimentional (3D) seismic, up to a total amount of $17-million. On meeting the conditions of the farm-out agreement, which included formal regulatory approval by the government of the Seychelles, Ophir would pay WHL Energy $4-million in cash for partial recovery of back costs.
Following the acquisition and evaluation of the initial seismic, and before the end of July 2015, Ophir could either withdraw from the farm-out or exercise the option to both fully fund the acquisition of a further 1 000 km2 of 3D seismic, up to $12-million, and to fund 90% of the costs of the first exploration well, up to a total amount of $30-million.
WHL Energy MD David Rowbottam said on Friday that the transaction with Ophir was not only an opportunity for WHL Energy and its shareholders, but also for the people of the Seychelles, with Ophir Energy able to bring its technical expertise, experience and a strong cash balance to support exploration of the Seychelles’ petroleum prospectivity to unlock the high value potential contained within this large and vastly underexplored exploration area.
“We look forward to executing the final documentation for the farm-out to become unconditional before the end of this month, heralding the official start-up of our JV [joint venture] with Ophir Energy,” Rowbottam said.