whl close to sealing farm outs, page-4

from an article that ive read


WHL Energy is nearing the completion for farm outs of two of its prized assets which includes acreage of the Republic of Seychelles and the La Bella discovery off south-east Australia.

Speaking at a media lunch in Perth, Western Australia, WHL managing director Steve Noske said he hoped to be in a position to name the partner for its Seychelles asset by early next month.

WHL signed a letter of intent with an, as yet, unnamed European-based oil and gas producer earlier this year for a potential farm-out of its wholly-owned 17,345 square kilometre exploration area off the Seychelles.

It also revealed earlier this month that it had received government approval for the terms of the proposed farm-out.

“I'm not announcing a potential joint venture subject to government approval or subject to final due diligence,” Noske explained.

“Due diligence has been complete, commercial terms have been complete, equity and all those sort of aspects have been completed, government approval is in place now and they're doing final corporate due diligence.”

Once the corporate due diligence is completed, the potential farm-in partner will take the proposal to the board which Noske hopes will happen this later month but he conceded it could be pushed back until the July meeting.

“We are confident that the arrangements and the joint venture will become real and known to the market, whether it's going to be later in June or early July we'll let you know,” he said.

While Noske was not in a position to name the potential farm-in partner he noted that it was large organisation in the top 100 of the Global Fortune 500 list.

He added the farm-in company currently produced about 300,000 to 400,000 barrels per day and was targeting production of 1 million bpd by roughly 2018, with a middle objective of 500,000 bpd.

“Now that objective was only going to be met by obviously finding some good frontier regions to be part of and they did see the Seychelles as being an oil play and they agreed with our interpretation about the potential for oil,” Noske said.

He also revealed that the potential partner, if the farm-in goes ahead, plans to shoot roughly $25 million worth of 3D seismic over the Seychelles acreage prior to drilling any wells, with the survey expected to kick off in December.

WHL has previously stated its Seychelles acreage is estimated to hold mean prospective resources 5.5 billion barrels based on the 27 prospects and leads it has identified within the offshore area.

Noske also highlighted the fact that it would look to expand its footprint in the Seychelles in partnership with the proposed farminee.

As previously reported by Upstream, the Seychelles government has kicked off an offshore acreage round which Noske said the company would take part in with its partner.

“We, with the knowledge of our areas, know where we would like to focus our attention,” he said.

“We do have the support of our partner, so we do believe we will put in a bid, probably for two 10,000 square kilometre areas.”

Noske also revealed that the company expected to unveil the potential farm-in partner for the La Bella discovery in Vic/P67, off the Australian sate of Victoria, later this month.

WHL announced that it had entered farm-in discussions with an unnamed party last year and Noske said he expected the Australian Securities Exchange to be aware of that partner by the end of the month.

The company has previously estimated the La Bella area could hold a potential unrisked mean prospective resource and best estimate contingent resource of 17.8 billion cubic metres of gas and 4.9 million barrels of condensate.

The permit also contains s a number of offset gas prospects and leads, including relatively low risk prospects present at Highlander and West La Bella which could provide additional tie-back opportunities to a potential La Bella development.

The block lies near existing development infrastructure including the Santos-operated Casino development, Origin’s Otway gas project, BHP Billiton’s Minerva development and Tru Energy’s Iona gas plant.

As a result it is likely that a potential La Bella development could involve a subsea tie-back to the existing infrastructure.

Noske said that the company was aiming for first gas from La Bella by 2017, adding that the asset could provide roughly $3 million of cash flow per month for WHL with the company's remaining target equity post farm-out, adding the company had no intention of offloading the asset as it expands it Seychelles operations.

“The company's got very much an eye to retain this asset as best as we can, retain as much equity as we can and to continue all the way through to production and keep the asset as a source of revenue to grow the company,” he said.