- Global Oil and Gas (GLV) enters a heads of agreement with Western Gas to acquire a 25 per cent interest in its Sasanof prospect in Western Australia
- The companies will equally fund drilling of the Sasanof-1 well within the WA-519-P permit which is one of three permits that make up the Sasanof prospect
- To support exploration costs, GLV has received firm commitments to raise up to $11 million through a placement
- GLV says Sasanof holds low CO2, liquids rich gas potential which represents a key part of WA’s transition to a cleaner energy economy
- Company shares are up 26.3 per cent to trade at 2.4 cents
Global Oil and Gas (GLV) has entered a heads of agreement with Western Gas to acquire a 25 per cent interest in its Sasanof prospect.
The proposed Sasanof-1 well is within the WA-519-P permit which is located 207 kilometres northwest of Onslow in Western Australia. The WA-519-P permit is one of three permits across the Sasanof prospect.
According to an independent assessment by ERC Equipoise the Sasanof prospect has estimated gross 2U prospective resources of 7.2 trillion cubic feet gas and 176 million barrels of condensate with a 32 per cent chance of success.
This agreement will see GLV fund 50 per cent of the costs to drill the Sasanof-1 exploration well through a 25 per cent acquisition in Western Gas (who holds the licence for WA-519-P) and a 25 per cent economic interest in parts of the Sasanof prospect in adjoining Western Gas permits.
Drilling costs are expected to be around US$20 million (A$26.8 million).
The Sasanof-1 well will be a vertical well and drilled to a depth of 2500 metres in 1070 metres of water. It provides a low cost, high impact exploration activity in a proven hydrocarbon province.
Global Oil and Gas Director, Patric Glovac, commented on the deal.
“The 25 per cent earn-in to the Sasanof Project will enable the company to be the only junior in Australia with significant exposure to the North West Shelf which in my opinion, contain some of the best drillable offshore prospects in Australia,” he said.
“The low CO2, liquids rich gas potential of Sasanof could represent a key part of Western Australia’s transition to a cleaner energy economy.”
Western Gas Executive Director, Will Barker, was pleased to have GLV’s support for the drilling program.
“We are delighted to have GLV on board to support this important drilling campaign that, on success, has the potential to be a game changer for the North West Shelf at a time of declining production and expected gas shortages.”
To support the Sasanof earn-in costs, GLV intends to raise up to $11 million through a placement.
The energy stock received firm commitments from sophisticated and professional investors to issue 687.5 million shares at 1.6 cents each.
Company shares were up 26.3 per cent to trade at 2.4 cents at 11:40 am AEST.