JOHANNESBURG (miningweekly.com) – Oil and gas firm Cooper Energy is set to undertake technical work on two of Melbourne-based gas explorer Bass Strait’s offshore permits in the Gippsland basin, the ASX-listed companies announced on Friday.

Bass Strait said in a statement that the nonbinding agreement it had signed with Cooper Energy was the first significant step to determining the potential of Gippsland to supply into the eastern Australian gas market, which was projected to fall short in supply from 2015.

“It is a market dynamic that can, and will, invigorate the near-term opportunities of the Gippsland basin and we believe Cooper Energy has been at the forefront of identifying this opening and joining with Bass to evaluate and, if successful, commercialise, these two permits,” Bass Strait CEO Terry White said.

Cooper Energy was tasked with reprocessing and merging multiple three-dimensional seismic datasets and selected QI/AVO analyses, including 430 km2 within the Vic/P41 permit.

Cooper would be allocated a 25.8% stake in the Vic/P41 permit and have the option to acquire a 50% shareholding in Vic/P68 in return for progressing planned work programmes based around modern geoscience technologies and capabilities and subject to the completion of the reprocessing and data interpretation.

The agreement was also subject to other conditions, including Bass Strait obtaining government approval for a proposed work programme variation in permit Vic/P41 and entering into a similar agreement regarding Vic/P68.

The two permit regions, which were “highly prospective for gas”, were close to existing subsea pipeline infrastructure linking the fields to onshore gas processing facilities near Orbost and Longford, in eastern Victoria.

Cooper Energy MD David Maxwell commented that the agreements were part of the company’s strategy to concentrate resources on opportunities in the Eastern Australian energy market, which possessed strong commercial fundamentals.