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gas pipeline agreement signed ASX/media announcement for release Tuesday 15 November 2005
GAS PIPELINE AGREEMENT SIGNED
Great Artesian Oil & Gas Limited (ASX: GOG), as operator of the Smegsy Block
Joint Venture (Joint Venture), wishes to advise that the Smegsy Block Joint
Venture parties have signed a Well Tie In and Services Agreement with the
South Australian Cooper Basin Producers (SACBP), for the construction of a
pipeline connection from the Joint Venture’s Smegsy-1 gas discovery well to the
SACBP’s pipeline system, in PEL 106. The tie-in pipeline is approximately 4.5
km in length.
Construction of the tie-in pipeline is expected to commence shortly and be
completed by the end of the year. Once completed, revenue from first gas sales
will quickly follow, the Joint Venture having announced in September 2005 that
it had also signed a Gas Sales Agreement with the SACBP. The Well Tie In and
Services Agreement also provides for the SACBP to provide on-going
maintenance of the tie-in pipeline construction of which will be fully funded by the
Joint Venture.
In what was the first Gas Sales Agreement entered into by the SACBP for
purchase of third party Cooper Basin gas, completion of this tie-in pipeline will
represent a significant step for the Joint Venture, and for Great Artesian in the
commercialization of any future gas accumulations found within this portion of the
Cooper Basin.
“This Well Tie-in Agreement, coupled with our earlier Gas Sales Agreement
completes the arrangements for commercializing any further gas discoveries we
make. The Joint Venture has been very pleased with the outcome of our
negotiations with the SACBP and we look forward to consolidating our
relationship through other discoveries which may be made during our active
exploration drilling program in the region” Mr Norm Zillman, Chairman of Great
Artesian Oil and Gas Limited, said.
Once the tie-in pipeline is completed an initial phase of extended production from
Smegsy-1 will allow determination of optimal flow rates, following which the Joint
Venture will be in a position to forecast future revenue earnings.
This announcement comes at a time when Great Artesian is about to recommence
its drilling activites, with Rossco-1 scheduled at a location
approximately 5 km north of the Smegsy gas field in early December. This will be
immediately followed by the Udacha-1 and Middleton-1 wells which are also in
PEL 106 region. Previously, it was announced that Enterprise Energy will also
participate in both Rossco-1 and Udacha-1, earning a 12.5% interest in any
commercial discovery by funding 25% of the well costs.
Interests in the Smegsy Block Joint Venture are:
Great Artesian Oil and Gas Limited 75.0%
Enterprise Energy NL 25.0%
Participants in the SACBP are Santos Limited (Operator), Santos Petroleum Pty
Ltd, Bridge Oil Developments Pty Ltd, Santos (BOL) Pty Ltd, Vamgas Pty Ltd,
Alliance Petroleum Australia Pty Ltd, Reef Oil Pty Ltd, Delhi Petroleum Pty Ltd,
Origin Energy Resources Ltd, Novus Australia Resources NL and Basin Oil Pty
Ltd.
Further information can be obtained from Dr Ray Shaw, Managing Director,