- Prominence Energy (PRM) signs a binding term sheet with Western Gas to acquire a 12.5 per cent interest in the Sasanof gas prospect, located in Australia’s Northwest Shelf
- In the new year, a well will be drilled at the prospect which is being 50 per cent funded by ASX-lister Global Oil and Gas (GLV) and another 25 per cent is being funded by PRM
- Subject to shareholder approval and the well being funded, PRM will issue Western Gas 30 million options and 90 million shares, as well as subscribe for US$5 million in shares
- PRM is pleased to participate in the well drilling as there’s a good chance of finding gas and “success would be transformational for PRM”
- Company shares have been trading down 4.55 per cent at 1.1 cents
Prominence Energy (PRM) is set to acquire a 12.5 per cent interest in the Sasanof gas prospect which is located on the Northwest Shelf in Australia.
The company signed a binding term sheet to acquire the 12.5 per cent shareholding interest in Western Gas, the permit holder of WA-519-P in which the Sasanof prospect lies.
The Sasanof Gas Prospect covers up to a 400-square kilometre area across three exploration permits and one retention licence — three of which are owned and operated by Western Gas.
As estimated by an independent assessment, the prospect has an estimated 2U prospective resource of 7.2 trillion cubic feet (tcf) gas and 176 million barrels condensate, with a 32 per cent chance of success.
A rig contract was signed to drill a well at the Sasanof prospect in March/April 2022. Fellow ASX-lister Global Oil and Gas (GLV) has committed to funding 50 per cent of the well in exchange for a 25 per cent interest in Western Gas. Together, GLV and PRM will fund 75 per cent of the total well costs and Western Gas is in discussions to fund the remaining 25 per cent.
Western Gas Executive Director Will Barker was delighted to have Prominence onboard.
“Prominence joins us, and our existing partner Global Oil and Gas, at an exciting time as we continue to achieve key project milestones and progress towards drilling of Sasanof-1 in March/April 2022.”
The well is expected to be drilled to an approximate depth of 2500 metres in 1070 metres of water and cost between US$20 and $25 million (A$28.4 million – $35.5 million) with PRM’s share to be in the range of US$5 to $6.25 million (A$7.09 million – $8.9 million).
Subject to shareholder approval and once the Sasanof well is fully funded, PRM will issue Western Gas 30 million PRMOB options and 90 million PRM shares. Prominence will also subscribe for US$5 million worth of shares in WG519 and also loan to WG519 25 per cent of any over runs up to $5 million when cash called.
Prominence Managing Director Alex Parks commented on the company’s participation in the well.
“PRM is delighted to be participating in the drilling of the Sasanof prospect. It is a giant structure with a good chance of finding gas. Success would be transformational for PRM.”
Company shares were down 4.55 per cent to trade at 1.1 cents at 11:57 am AEDT.