BP Developments Australia has signed a rig contract for the drilling of the Ironbark prospect in exploration permit WA-359-P, offshore Western Australia.
The Ocean Apex semisubmersible drilling rig, operated by Diamond Drilling, has been contracted by BP, which is acting as operator on behalf of Cue Exploration (Cue) under a co-ordination agreement.
The Ironbark prospect is estimated to contain approximately 15tcf of recoverable gas resource. The Ironbark-1 well, which will be drilled up to 5500m depth, is expected to be the first test of the Ironbark prospect.
Cue Energy CEO Matthew Boyall said: “Ironbark is a genuinely world-scale prospect in a highly prospective address. Cue’s 21.5 per cent participating interest provides a company-changing opportunity for Cue if the well is successful.
“Securing the Ocean Apex sets a clear path for drilling. The rig contract, escrow funding and shareholder approval for New Zealand Oil & Gas to farm in have all been satisfied. NOPTA approval of an extension to the permit term to allow the well to be drilled is a remaining condition and Cue expects to submit an application soon.”
The company said that the drilling is expected to start in late 2020, after completion of the Ocean Apex’s other commitments. BP has initiated environmental planning activities for a site survey of the well location and the drilling activities.
On 26 October 2018, Cue, BP, Beach Energy and New Zealand Oil & Gas announced a co-ordination agreement which facilitates BP to act as operator on behalf of Cue in planning the Ironbark-1 well prior to title transfers and creation of a formal joint venture.
Under the coordination agreement, Cue has contributed $8.08million from its existing cash into an escrow account.
Cue has contributed the amount to secure the proportion of its costs that are not carried by other parties and is expected to draw the amount closer to the well commencement date.
BP owns 42.5% interest in the WA-359-P permit, while Cue, Beach Energy, and New Zealand Oil & Gas, hold 21.5%, 21% and 15% interests, respectively.