original pxa agreement

The text below is taken from the announcement dated 28 nov 08, basically each well is to cost $4mil and PXA were going to fund 40% ie $1.6mill per well.


For PXA to retain up to a 20% interest in all of Central’s operated permits, the group are to fund 40% of the first $3 million seismic works and 40% of the first 3 wells in each permit subject to the grant of the permit concerned. (2:1 “promote”). Average well costs for conventional drilling to date in the Joint Venture have been c.$5.5 million each inclusive of mob, demob and road building. The Joint Venture also recognises that each $2 million increment of expenditure on non-conventional drilling such as Coal Bed Methane (CBM) or other non-conventional play types restricted to a 1,000m depth qualification will count as 1 well in the 3 wells plus seismic works required to retain the 20% interest in each permit.
Central operates 9 granted permits and 19 permit applications. If all of the permits were to be granted, the Joint Venture continues to the 20% retention level in each of them and each well cost an average of $4 million, then the cumulative expenditure required by PXA to retain a 20% interest would be 40% of $420 million or c. $170 million.