apache farmin to bru's coastal & east. permits

I have posted the below ideas to Buru thread. This farmin tells me that NSE's Southern Canning project is getting more attention by other major O&G majors.

It look slike to me that Apache will exercise its option for the Acacia permits of Buru and MC, after NSE and JV drilled two wells on Sahara shelf and Crossland Platform.

I think the first well will be drilled on Sahara Shelf again (most probably on the same place of Gibb maitland- 1 well) and the second well will be drilled on Crossland Platform. Then Apache will exercise its options for this part of the deal.

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I agree with Speculator that this farmout agreement is an excellent outcome for Buru shareholders but you will have to wait for the year 2015.

The coastal permits don’t have much value as you can see from what is given for them on this agreement. $25 is not much. However the money will be spent by Apache for the Acacia permits are huge if they exercise their option on those permits. It is not definite that Apache will exercise their option though.

I think Apache prefers to wait for the results of NSE's two wells which will be drilled on Sahara Shelf just south of the main Acacia permits (especially the EP-477) in the 3Q of next year.

As you can see it is said on the agreement that Apache can exercise the option before 30 September 2014 or any later date agreed by the parties if the aero gravity and seismic surveys have not been completed before then. This date just tells me they will have the opportunity to see NSE's results from those two wells.

The money Apache has agreed to spent on Acacia permits are over $100m I think. They agreed to spent the 80% of 2 exploration wells plus two appraisal wells. Each around $15m at least. Plus the aero gravity survey currently being conducted by Buru and MC and a 650km seismic survey planned to be conducted by Buru and MC in 2014.


The permits Apache farms in are as below.

The Acacia permits are mainly on Crossland Platform and over the major fault lines. Especially the EP-477 is at the north of NSE's permits which are also extends to Crossland Platform from Sahara Shelf at the south. Sahara Shelf is the main area NSE drilled the Gibb Maitland well (which the drill pipe got stuck).

As you can see on the map below there are a few types of plays here. NSE says that they are looking for shale oil but I think they are also looking for very large conventional traps on Sahara shelf which are the results of Goldwyer carbonate built ups. The conventional traps could also be the result of Acacia sandstone reservoirs in the whole area in both Sahara shelf and Crossland Platform.

Therefore, if NSE two wells which will be drilled in the dry season next year could prove the prospectivity of Goldwyer and Acacia sandstone plays, then Apache would be confident to exercise their options I guess.

(The image below is from NSE's Prospectus in 2008 when it was listed on stock market. NSE has never published and mentioned about this structure later on)

As you can see on the EIA's prospectivity map, the area Apache farms in is not shown as prospective for shale oil and gas. However Apache which has very high level of experience on unconventional plays, still loves to farmin. That's interesting for the whole Canning Basin players.

Especially for NSE.